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What Currency Pairs To Trade?

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  #1  
Old 21-09-2009, 14:23
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Default What Currency Pairs To Trade?

Many forex brokers advertise themselves by boasting very low spreads. While this may be appealing to some forex traders, they shouldnít turn a blind eye to other characteristics of the broker.


Guest Post by Yohay Elam of Forex Crunch Ė Forex Trading Blog


Advertisements across the web flaunt very narrow spreads between the Ask and Bid prices. For popular pairs such as the EUR/USD, Iíve seen commercials that offer a spread as low as half a pip. The spreads are larger for less popular pairs, for minors crosses and exotic currencies.


While low spreads can be appealing to scalp traders and for those who make lots of trades per day, this isnít that important for most traders. More ďreasonableĒ traders donít make too many trades, but rather wait for an opportunity. When an opportunity arrives, they seize it, and go for a profit of many tens of pips, if not hundreds. In such trades, the spread doesnít make a big difference.


But when searching for a forex broker, those that offer tighter spreads, seem to offer a better price. But itís not only about the price Ė itís about the quality of service and the trust you give your broker.


For example, some brokers can close your trade when it hits the Stop Loss point. While this can happen naturally, some brokers will round the numbers in order to make you lose your money. Iím sure youíve heard about such cases.


When you to make a trade, you trust the software to react quickly and flawlessly. Is your software reliable? Does it get stuck in crucial moments? Sometimes youíre away from your computer, but you still want to act, by calling your broker. Do they always answer your calls quickly? Are they helpful?


These service factors are very important. Iíd trade a tight spread for better quality of service, and Iíd like to work with a broker that I trust over a broker that gives me a better deal, but might disappear.


An excellent, though not perfect method of checking out the broker is by starting with a forex demo account. While a demo account canít fully simulate the experience of a real account, it can make you acquainted with the software, acquainted with the broker and give you a feel if you can trust the broker or not.


If youíre lucky enough to find a reliable broker that offers good spreads, good for you! But donít be tempted and blinded only by the tight spreads.
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Old 23-09-2009, 05:01
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I use Hoanda Corporation - New York who gave me spread for EUR/USD 0,9 pips tue to Fri, for Monday & Holiday it can be 1,5 pips, 2 pips, until 3 pips. But when Sun all pairs will be 10 pips (some 20 pips).

I Agree Small Spread its good for scalp, but for Swing i ussually used GBP/USD & EUR/JPY (more volataile than GBP/USD but not so wild like GBP/JPY).

For Begginners (Swing) i thing AUD/USD is one of the best choice.


Kind Regards;


:)


Manus168
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Old 30-09-2009, 13:46
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Very nice , but manus I have to tell you your picture is scary!

Quote:
Originally Posted by manus168 View Post
I use Hoanda Corporation - New York who gave me spread for EUR/USD 0,9 pips tue to Fri, for Monday & Holiday it can be 1,5 pips, 2 pips, until 3 pips. But when Sun all pairs will be 10 pips (some 20 pips).

I Agree Small Spread its good for scalp, but for Swing i ussually used GBP/USD & EUR/JPY (more volataile than GBP/USD but not so wild like GBP/JPY).

For Begginners (Swing) i thing AUD/USD is one of the best choice.


Kind Regards;


:)


Manus168
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  #4  
Old 27-10-2009, 21:04
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Which currency pair to trade is one of those questions I think each trader has to answer for themselves. When I started trading Forex (manually), I used to love the EURJPY cross -- it seemed to have a very predictable oscillating price pattern that common indicators (AO, Alligator, Fib retracements) were able to show, and that I was then able to trade.

All that went away as I began to look into auto-trading and scalping. Then, the spread took on a much greater importance. Now I hardly ever trade manually. Being human and a part-timer, I can't seem to bring my A-game to every session. The robot, in contrast, is consistent... not infallible, to be sure, but consistent in a way that lets me say -- "that looks like a good market for <some robot>". Plus, they don't sleep. :)

Thus, I have gone from a happy manual trader of the Yuppy (a.k.a. EURJPY) to an auto-trader of the thinnest spreads I can find, which means EURUSD. I used to avoid that pair, but for auto-trading, it seems to work.

My most recent alteration to this approach has been to add a so-called commodity currency to my mix. Right now, I have the same robot trading EURUSD and AUDCAD in the same account (different charts, obviously). I chose the AUDCAD primarily because it seemed to be not correlated with EURUSD at all... I may choose another commodity pair, but the idea of having a cross is still attractive, despite the larger spreads and the "hidden" issue of translating things to and from the account currency (USD).

MM

Last edited by MusicMan; 27-10-2009 at 21:06.
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Old 30-10-2012, 06:37
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Default Re: What Currency Pairs To Trade?

For swing trading, I prefer to pick currency pairs that has a risk currency on one side and a safe haven currency on the other. This is because it provides the greatest 'disparity' between the two currencies and will usually react to market sentiments on 'risk on' and 'risk off'.

Some e.g. of these currency pairs are: EURUSD, GBPUSD, AUDUSD, USDCAD, NZDUSD, EURJPY, GBPJPY, AUDJPY, CADJPY and NZDJPY.

For scalping, it is not so much about the currency pairs than it is about the time frames. Specifically, scalping is usually done on time frames that are below hourly charts, such as M15, M5 and even M1. This is because it is 'get in get out' trades for 5 to 15 pips.

I am currently using FXPRIMUS. I like that they offer one of the most competitive spreads in the market. For example, spreads for EURUSD is usually less than 0.5 pips and spreads for GBPUSD, EURJPY and GBPJPY is usually between 0.5 to 1.5 pips. :)
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