Smart Forex Trading: Sticking with the Big Eight

currency used for forex trading

Forex Trading Currencies

Smart Forex Trading

No matter how many articles flood the Internet lauding the eight major currencies and explaining why they should be traded, there always seem to be people involved with Forex trading falling for the idea of finding that “once in a lifetime deal” among the minor currencies. The thing is, the “once in a lifetime deal” is a myth, and usually even the same can be said with the stock market.  Yes, Google was great if you got in at $80 a share, but Google started at $80 a share, not $1.

The Forex market offers leverage, which is as close to a “Holy Grail” as you can get.  100:1 leverage offers you a chance to make enormous profits off even relatively small movements in the Forex market.  There is a fortune to be made in Forex: and it’s in the major currencies when traded with a solid trading strategy and analysis.

When Forex trading, there is no question that you should stick with the 8 “major currencies” traded. Trading done with currency pairs should include two of the big eight currencies.  There’s no reason to get cute when the money is there to be made for anyone willing to do their homework.  For example, if you’re buying Japanese Yen with US Dollars, the pair will be listed as USD/JPY.  The first currency is the one you currently have and the second currency is the one you wish to purchase.

There are 8 major currencies for Forex trading.  These are:

United States Dollar (USD)
European Union Euro (EUR)
Japanese Yen (JPY)
British Pound (GBP)
Swiss Franc (CHF)
Canadian Dollar (CAD)
Australian Dollar (AUD)
New Zealand Dollar (NZD)

These eight currencies constitute the far majority of currency trades and are very helpful for forex trading. These are the currencies that are from stable governments and economies, and are widely regarded as some of the most stable and safest in the world, which is why they are on this list and traded the most often.

Out of these 8 currencies, the USD is the most traded currency.  It is involved in 89% of all trades.  It is followed by the EURO at 37% and the Yen at 20%.

What currencies do you find yourself using the most when Forex trading?

From Jason Fielder: Founder, ForexImpact.com

Comments are closed.

Previous post:

Next post: