MAJOR FOREX CURRENCY PAIR LIST
Major currency pairs are those set of currency pairs that have the US dollar at one side of the currency pair either on the base currency or on the quote currency. They are the most frequently traded currency in the forex market and accounts for 26% of average trade daily. Each of these currency pairs has unique features and characteristic, they include:
This currency pair is, without doubt, the most popular among all other currency pairs. They are the most traded currency pair in the forex market. This currency pair is very volatile and this makes it compatible for scalping and day trading. It has an average of 24.1% trades per day and it’s extremely sensitive to economic growth. Its average broker speed is 2 to 3 pips, its daily average range is 90 to 100 pips, and its best time for trading is 0700 GMT-1700 GMT Euro season
This currency pair is the second most traded pair in the forex market; it has an average trade of 18. 4 trades daily. The Japanese Yen is one of the famous currencies in the world although it was diminished as Japan struggles to lower its exchange rates. Its average broker speed is 2 to 4 pips, its daily average range is 80 to 90 pips and its best time for trading is 2400 GMT-0900 GMT Asian season
This currency pair is one of the most volatile currency pairs in the forex market which generates a lot of false breakouts and wild price movements. Because of this features, trading this currency pair requires a lot of skills and knowledge. It has an average of 41% trades per day and its average broker speed is 4 to 5 pips, its daily average range is 150 to 200 pips, its best time for trading is 0700GMT-1700 GMT Euro season.
This currency pair is seen to be the least liquid major currency pair. It is characterized to be negatively correlated with the EUR/USD currency pair. It has a total daily volume trade of 4%. It has an average of 41% trades per day and its average broker speed is 4 to 5 pips, its daily average range is 120 to 135 pips, its best time for trading is 0700GMT-1700 GMT Euro season.
AUD/USD, NZD/USD, USD/CAD
This set of currency pairs are called commodity currency pairs. They are primarily based on the raw materials associated with the currency’s country. Australia, Canada, and New Zealand dollar are monetary units of commodity-exporting nations. There is a great range of diversity seen in commodity currencies in terms of their trade balance and economic strength and they are strongly depended on the buoyancy of the global commodity market.
ADVANTAGES OF TRADING THE MAJOR CURRENCY PAIRS
VERY LARGE VOLUME
Major currency pairs have very large interest and understanding among the forex traders. It is highly sought for in the forex market and this factor leads to a very high volume of trades every day. The fact that these currency pairs attract high volume has a great significant bearing on price actions, risk factor, and volatility that grow with trading them. High volumes also have a great impact on liquidity factor and encourage great profit maximization.
SMALL BID-ASK SPREAD
Another key advantage of trading major currency pair is the fact that the spread between the bid and the ask price is small. It is just 2-3 pips compared to the 50 pips seen in the exotic currency pairs during the course of daily trades. This singular feature decreases the risk factor in trading this currency pair.
These are by very far the most wanted and most popular choice of trade among forex traders. Because of this, there is an availability of huge research materials and analysis for these currency pairs. This research has no bias and tilt in it, therefore, it is highly trusted by forex market traders.
LOW TRANSACTION COST
Because of its high popularity and low risk involved, the cost of carrying out this trade is low and many times the cost factor is most admired by small-time traders and beginners.
DISADVANTAGES OF TRADING THE MAJOR CURRENCY PAIR
Given the high volume and high pace of trade, the price action of these currency trades is not easily predicted. Market and pip movements, as well as the pattern of trade actions, is quite mixed up in the case of major currency pairs. Unlike other currency pairs, the uncertainty in potential trend formation is way too high.
HIGH RATE OF FOREX TRADERS
The huge rate of ignorance, the low exposure of forex traders in the forex trading community and low transaction cost seen with the major currency pairs lead to the flooding of the forex market with non-serious forex traders.