The forex market can be very intimidating to beginners. Many markets in the forex space are very volatile, especially for new traders who do not have trading strategies yet. However, there are markets that are more favourable to beginner traders. In this review, we will be looking at the best currency pairs to trade for beginners.
Main Groups of Currency Pairs
A forex currency pair means two national currencies that are traded back and forth. Traders make money by buying a national currency that is lower in value and selling it off when the value rises. These currency pairs are in three main groups. These include major currency pairs, minor currency pairs and exotic currency pairs.
The major currency pairs involve the currencies of the countries with the largest economies. All of these currency pairs include the US Dollar as it is the top reserve currency in the world. Major currency pairs include:
Minor currency pairs do not involve the US Dollar on either side of the trade. The major currencies you will find on minor currency pairs include GBP, EUR, YEN or even AUD. Examples of minor currency pairs include:
Exotic currency pairs are those that have a major currency on one side and the currency of a rising economy on the other. Some examples of such currency pairs include:
With that, let’s look at the best currency pairs to trade for beginners.
EURUSD is the most popular currency pair in the forex space. This currency pair is fairly gentle on traders because it has relatively low volatility. It involves the two biggest currencies in the world being traded back and forth. As such, it is heavily traded leading to high liquidity. In fact, the Euro paired with the US Dollar is the heaviest traded currency pair. This high trading volume leads to lower spreads on broker sites. Low spreads mean that traders do not have to pay expensive fees to trade. These are the main reasons why the EURUSD currency pair is best suited to trade for beginners.
This currency pair has the US Dollar on one side and the Japanese Yen on the other side. It is the second most heavily traded currency pair in the forex market. This means that this currency pair also has high liquidity. Consequently, it means that the pair will have favourable spreads on forex broker sites. However, traders should be aware of the effects of energy prices on this currency pair. The price of the Japanese Yen is significantly influenced by energy prices.
The Great British Pound paired with the US Dollar is another great currency pair to trade for beginners. This currency pair is the third in trading volume in the forex market. It tends to move together with the EUR USD pair. Hence, this currency pair is favourably more predictable compared to other currency pairs. The high trading volume associated keeps the spreads on this forex pair low. Hence the trading fees are much smaller.
This is another currency pair suitable for trading by beginners. It involves the US Dollar on one side and the Swessie on the other side. It tends to move opposite the EURUSD and the GBP USD pairs. As such, it is fairly more predictable for beginners to trade. Additionally, it has a high trading volume, hence high liquidity. The spreads are relatively low on brokers in favour of traders.
The US Dollar paired with the Canadian Dollar is not as heavily traded as some other major currency pairs. However, it is fairly popular among professionals and beginners. It still has considerably high trading volumes in the market. This means the spreads are not too high on broker sites. Nonetheless, traders should be aware of crude oil prices when trading this currency pair. Canada is a big crude oil producer and this affects the value of its currency.
Where to Trade The Best Currency Pairs
None of the brokers listed below supports forex trading in the US
eToro is one of the best multi-asset brokers in the market today. The company has been operating in this space since 2007 and serving millions of clients. eToro is suitable for beginner traders as it features an education section for people who want to learn new trading strategies. This section contains a robust collection of video courses teaching basic strategies and complex strategies to traders. Some of the currency pairs you can trade on eToro include EURUSD, GBPUSD, USDCAD and USDCHF among other 45+ currency pairs.
Deposits and withdrawals are favourably easy on eToro as it supports various payment options. These include Credit/Debit cards, Wire Transfers, Skrill, Neteller, PayPal, WebMoney and UnionPay. The minimum deposit is $200 in most countries. The company also offers tight spreads to its clients for the best trading experience. Further, eToro has regulatory licenses from the FCA, the CySEC and ASIC.
81% of retail CFD accounts lose money
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs (such as forex, commodities and stocks).
Exness is another reputable forex and CFD broker with multiple regulatory licenses. The company has regulations from CySEC, BVIFSC, FCSA and FSA. It is suitable for beginner traders as it features analytical tools and an events calendar to keep traders informed.
Exness supports various payment methods for clients to fund their accounts. These include Wire Transfer, Skrill, Netteller, Credit/Debit cards and Mobile Money. The minimum deposit on Exness is $1. However, investors can practice trading without risking their money on a demo account. Some of the best currency pairs to trade on Exness include EURUSD, GBPUSD, USDCAD and USDJPY among others. There are over 100 tradable currency pairs available on Exness. Please note that the broker unlike most of the brokers out there does not accept European clients.
Remember that forex and CFDs available at Exness are leveraged products and can result in the loss of your entire capital. Please ensure you fully understand the risks involved.
FP Markets is one of the best forex and CFD brokers in the market for beginners. Its website has a significant collection of training materials available to its clients. There are trading course videos, webinars, podcasts, events, platform video tutorials and ebooks available. This makes FP Markets more suitable for beginner traders who want to learn new strategies. Additionally, FP Markets is regulated by CySEC and ASIC.
Further, FP Markets supports various payment options. These include Wire Transfers, Credit/Debit cards, Paypal, Skrill and Neteller. The minimum deposit amount on FP Markets is $100. Clients can trade some of the best currency pairs on FP Markets including EURUSD, USDJPY, AUDUSD and GBPUSD among others. FP Markets features over 60 tradable currency pairs on its platform.
75.3% of retail CFD accounts lose money
Evidently, major currency pairs are the most suitable for trading by beginners. They have high trading volume and hence low spreads. However, there is still a high probability of losing your investment in the market. Traders should only invest amounts they can afford to lose.
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