CHOOSING A CURRENCY PAIR TO START WITH

by Ntombi Malatsi | May 22, 2016 | FOREX FOR BEGINNERS, FOREX TRAINING

Choosing a currency pair to start with as a beginner.

Let me get straight to the point. There are several currency pairs available on mt4 market watch, but that does not mean a trader has to trade all of them. Knowing the different groups of currencies, their characteristics and the sessions  at which they trade well in, is very crucial in making that decision. It is also important to consider your location, if you are located in South Africa like me, you are very lucky as the most traded currency pairs are traded during London session (which is the most traded session of  all four sessions). London session is during our day time. Many traders who are located in other countries have to wake up for London session as it is during their night-time. I am that type of trader who analyses fundamentally and execute technically, so my views will  mostly be backed up by the method of trading that I personally use (which is fundamentally based), but which ever method of trading a trader uses, sessions are sessions and there is only one London session, read about my method of trading HERE.

As a beginner trader, you are always overwhelmed by the markets, which is why I think choosing few currency pairs to trade is a good start. I know of a very successful trader who trades only Eur pairs, be it as a major or a cross currency. He trades nothing else but Eur. A trader who trades currencies when the businesses of that country are open (during the day) is likely to make money, this is simply because of the activities like the exchange of money or transactions in their respective currency during their daily business dealings. Try to trade GBP pairs during Asian session, you might not get much out of your trade.

Currencies like GBP, EUR and USD are mostly involved in daily speeches/economic news. They are easy to follow. You can definitely start with one of them, if you chose to start with GBP (I know some traders in my class are probably saying, ahem!), you can easily follow news releases like UK GDP,UK bank rates, UK CPI, Unemployment changes just for starters. GBP and EUR would be a good start, and by the way, those two are highly correlated and Eur has the lowest spread of all major currencies, even though GBP has higher margin than most, but it trades very well during London session, read more about currency pairs to trade during London session HERE. Trading one or two currency pairs gives a trader a chance to learn as much as they can about that specific currency and it also eliminates confusion, of course you can always add a pair, you do not have to trade only one pair, but the more you trade a currency pair, there more you get to know it better and therefore trade it better. Thank you for reading here, I hope you found something practical that you can use in your own trading.