Which currency pair is the best?

The choice of currency pair, instrument or instruments on which we will enter into transactions is as important as the choice of platform. In addition, it should be done on similar terms. This is due to the fact that every currency pair can be both the best and the worst, thanks to the individual preferences of each investor. It is impossible to say which is the best of the best, because what is the evaluation criterion? The best is the one that is most or least variable? The one that is the most predictable? Predictable by what analysis technique? Or is the best one with the greatest liquidity? This may be an advantage, but I would not say that it could already be a proof of "the best".

So how do you choose "your" currency pair?

At first, it is usually recommended for inexperienced investors to interact only with the so-called major pairs that are the most popular. They have the lowest transaction costs and have the highest global turnover. It is even better if such an investor chooses the ones with the smallest amplitude of fluctuations, because this will gradually allow him to get used to constant changes in exchange rates. Perhaps this is a good idea for dosing trading emotions. However, with so many currency pairs, eventually even a novice investor will want to participate in a more dynamic action.

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Each currency pair has its own characteristics. One has more shattered movements, the other more peaceful. One makes medium traffic on 200.0 pips, the other one below hundreds. The behavior of the instruments may also depend on the time of day. For example, during the Asian session, the yen is at the center of attention, while the euro or pound are falling into the background. There is also a reaction to important macroeconomic data from the largest economies and correlation with other markets.

You have to pay attention to all these factors when choosing instruments, at the same time it is best to check on a demo account how we feel in a given market, because it is not said that everyone must trade on EUR / USD and it will come out to them. The characteristic behavior of less popular pairs (such as USD / PLN) may suit the investor. His analytical mind will find the perfect way to earn money on this instrument and he will feel very good on it.

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Currency pair for strategy or strategy for pair?

It remains a matter of selection strategies to a given currency pair. Can he, however, first find an interesting strategy and then look for an instrument on which he will work? It really doesn't matter because the effect will ultimately matter, but the first option should be the easier task because we have a certain number of available currency pairs, and there are an infinite number of types of strategies and their variances.

Analysis of the currency pair

To characterize a currency pair well, you need to spend some time observing the behavior of its exchange rate on different ones time intervals and at different times of the day, studying its variability. In addition, analysis of correlation with other instruments and tracking response to macro events should outline potential future behavior of the course.

However, it should be remembered that markets are constantly evolving, changing their dynamics and correlation relations, so watchful observation of the course behavior is most desirable, as well as adapting to the changes of the investment strategy used.