How to Choose the Currency Pair in Forex?

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There are many pairs in forex currency (pair). Normally have a 'behaviour' vary. There is a mutual influence, others not.

Type of Currency Pairs:
There are three categories of currency pairs; hand in hand, Cruz and exotic. The following points explain the currency pair in the three categories and the advantages or disadvantages of each.

• Main Currencies
This review currency pairs. This currency is the currency of the country which put in correspondence with the dollar the United States:

EUR/USD
GBP/USD
AUD/USD
NZD/USD
USD/JPY
USD/CHF
USD/CAD

Now, there are some things that we need to pay attention to discuss on this currency pair until we turn to discuss the other pair.

First of all, many of the major currency pairs are correlated in the movement of the average prices to move almost identical between them. For example, EURUSD and GBPUSD tend to move towards the same (is not exactly the same), GPBUSD are usually a little more stable than the EURUSD EURUSD, GBPUSD, but must be on the same trend, and then tell us they are positively correlated.

Then the pair USDCHF negative correlation for EURUSD, therefore if EURUSD USDCHF moves more, that it is more likely to move lower. You'll get if you took the chart EURUSD and USDCHF chart of the same amount of time. Under certain conditions, which will be almost similar, but are usually coincidence negatively.

So, how can we we have this correlation for you? This means that you must be careful when making business decisions that do step increase the risk of negotiation currently against the positions opened. For example, if you 'buy' EURUSD and GBPUSD, then "buy" in USDCHF too.

I have observed that USDCHF very 'chopped' relative trade EURUSD and GBPUSD and USDCHF rarely in my, I would like to focus on the EURUSD and GBPUSD, if you want to change European currencies against the dollar. This does not mean that you shouldn't change USDCHF, but note that, according to my experience, EURUSD and GBPUSD, gives a better price.

The EURUSD pair is also the most widely traded and are therefore the greater of the total volume of currency pairs. It also means that the EURUSD is more liquid.

• Raw materials
The currencies of the commodity is the name given to the currency of a country heavily dependent on exports of some materials such as profits. We also examined the major currencies "TC" is Australia dollar, dollar the New Zealand dollar and the Canada.

Gold and silver is real property, then they may also be considered "TC" and once more negotiated in U.S. dollars, as we mentioned above.

"" I have information from a friend (who already have experience in trade in the products of the currency), said, "AUDUSD, NZDUSD, gold and silver, it is preferable for the trade, tend to avoid the USDCAD, I feel often false gets trade 'the signal', this may have something to do to influence the price of crude oil. ''

• Crossrate
The opposite currency pair» is the parts that are not paired with the dollar of the United States, such as:

AUD/CAD
AUD/CHF
AUD/JPY
AUD/NZD
CAD/JPY
CHF/JPY
EUR/AUD
EUR/CAD
EUR/CHF
EUR/GBP
EUR/JPY
EUR/USD
GBP/USD
GBP/CHF
GBP/JPY
NZD/JPY

I do not recommend that you trade all this, crossrate and if you want, of course there are some that I recommend as: NZD/JPY, EUR/JPY, GBP/USD and AUD/JPY.

Four couples cross the more widely followed by merchants and that it is important to 'watch list' short against the currency pair that you can follow in your journey of forex.

Only for knowledge, for me the tips for beginners still use only a currency pair.

• Exotic species

The 'exotic' pair is a pair formed by the developed countries and developing. Here is a list of some 'exotic' negotiated more frequently:

USD/TRY

EUR/TRY

INR/USD

USD/MXN

USD/SGD

Pairs of exotic currencies is not the best place to start as a forex trader, especially beginners. It is important to remember that the "propagation" is too broad. This means that there is more risk into the exotic, it makes them more vulnerable to 'slide '.

Note:

"differential" is the price you pay to your broker) that is the difference between the bid and asked price, automatically, pays you each time you enter a trade, then it may be very low, sometimes only 1 pip, a pair of exotic may have very high spreads are usually more 10 points. Basically, means of propagation that negative figure in trade get gains at the beginning, it does not make sense if you choose a pair seal exotic spread 15 or 20 pips for the trade of exotic, well than the couple of pair and only 1-3 pips negative. Enter this probability for the benefit of his favour.

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