Forex trading is becoming more and more popular worldwide since this is the world’s biggest financial market with millions of participants and trillions of dollars being exchanged daily. Apparently, this I a highly competitive environment, it is rough and tough and very difficult to survive in.
That is why beginning traders cannot avoid multiple challenges on their way up to a professional trading career. Unfortunately, most of them fail to reach the top since they do not have good mentors by their side and therefore cannot resolve those issues the come across.
Indeed, there are multiple issues that have to be resolved in order to become an expert in Forex trading (or trading any other financial market). One of those issues is choosing suitable assets to trade. In this case, these are currency pairs. When beginners have been shown some valuable trading tips on some specific currency pairs, the choice is simpler. However, those who are just making their first steps in the rough environment of Forex trading usually do this alone and make a lot of mistakes.
This article is set to give beginners some valuable tips on how to choose suitable currency pairs for a decent start.
Well, when beginners start on their own, they can eventually arrive to the correct choice but they will have to spend a lot more time, effort and money when experimenting. More often than not, beginners start from majors including EURUSD, GBPUSD, USDJPY, USDCHF etc. After thousands of trades, they start choosing favorite currency pairs.
The more and harder a trader practices the deeper he/she starts understanding the essence of the price moves typical of his/her favourite currency pairs. If to take into account the fact that contemporary Forex brokers provide access to a whole lot of currency pairs, including USDHKD or USDMXN, it is very easy for a beginner to get confused. Well, it turns out that the correct choice depends on a number of factors. Masterforex-V Academy will share with us some of them.
Masterforex-V Academy Experts on Choosing Currency Pairs
If to consider the difficulty of choosing a currency pair, Masterforex-V Academy experts say that it is always important to think and analyze, to use your brain, whether you are trying do discover something on your own or you are learning something from professional mentors in the field. It is always important to simplify calculations so that they could be as easy to use as possible. When trading currencies, traders always pay some spread to the broker. Therefore, any trade starts as a loser. Therefore, the first thing we should keep in mind when choosing a currency pair is the spread you have to pay each time you open a trade. It should be as tight as possible.
There is one little but very efficient trick:
First you define the average ranges of price deviation over the last 12 months for several currency pairs and divide them by the spread you pay when trading those currencies. Then we get certain ratios. Those currencies that have higher ratios are more preferable for trading in terms of math.
And one more thing:
It is always better to start learning the ABC of Forex trading with 1 or 2 currency pairs since trading requires concentration instead of spreading your attention between 10 pairs and not getting efficient result due to poor trading decisions.
Trading decisions should be decent and based on solid criteria and conditions. Therefore beginners need to restrict the amount of currency pairs to the minimum so that their trading decisions could be as much weighted as possible.
If you are willing to start a professional trading career but do not know how and where to start, you are welcome to visit the FREE school for traders and investors under Masterforex-V Academy. Good Luck!
