Trading currency on the forex market offers all sorts of opportunities, whether to boost your income on the side or turn trading into a full-time career. For those who are considering getting into the currency trading game they will need to read up on the tricks and tips along with choosing which currencies to begin trading.
There are pros and cons to trading most of the currency pairs available through an ETX Capital platform, sometimes certain pairs are more attractive than others. There are a few things to consider before choosing one or more currency pairs to trade.
Political and Economic Situation
Many factors affect currency value, which leads to opportunities to buy currency when it is at a low price and sell high but also the risk of the reverse happening. Check the political situation and economic news regarding countries where the currency is used as events such as elections can cause it to lower in value. Changing interest rates and unpredictable governments can also devalue currency, so it is important they are researched beforehand.
Forex traders all have their own unique styles, and whichever type of category you fit into can impact upon the best currency pairs to begin trading. For the thinkers and those who like to play it safe, sticking with the Japanese Yen or the Swiss Franc are popular safe haven currencies. While anyone willing to take a risk may prefer the excitement, potential profits (and losses) that some of the minor currencies can provide.
When you’re just starting out trading the best idea is to choose one of the major currency pairs, as this will present the least amount of risk in case anything goes wrong. There are also many strategies for trading major pairs already available, making your life easier. More experienced traders may want to diversify their trading by including more minor and major pairs later on, possibly with some overlap at first.
You will also need to consider the costs involved with making a trade. Fees are incurred every time you make a trade but can often differ based on the amount traded and what broker or platform you use. When budgeting be sure to factor this in and ensure you are trading using the most affordable rates. Take all of this into consideration when deciding which currency pairs you will attempt to make a fortune from exchanging.