With the further development of the foreign exchange market in China, more and more foreign exchange miners have invested in it, and foreign exchange has become the preferred investment direction for its unique advantages.
Today, we will sort out the basic knowledge of foreign exchange currency pair trading, so that you can further deepen the understanding of foreign exchange currency pair.
The most commonly traded currencies in the market are called “major currencies”.
Most currencies are bought and sold against the U.S. dollar (USD), which is the most frequently traded currency.
Taking Doo Prime platform as an example, its foreign exchange currency pairs list eight frequently traded currencies, namely US dollar (USD), Euro (EUR), Japanese yen (JPY), British pound (GBP), Swiss franc (CHF), Australian dollar (AUD), Canadian dollar (CAD) and New Zealand dollar (NZD).
These eight major currencies account for 90 per cent of the global forex market.
At present, the mainstream currency pairs in the foreign exchange trading market are mainly those containing the US dollar, such as the risk-averse foreign exchange currency pairs: JPY/USD, Swiss franc /USD (CHF/USD) commodity currency pairs:
Australian dollar to US Dollar (AUD/USD), Canadian dollar to US dollar (CAD/USD), New Zealand Dollar to US dollar (NZD/USD) Risk attributes Foreign Exchange currency pairs: Euro to US dollar (EUR/USD), British pound to US dollar (GBP/USD) High interest goods foreign exchange currency pairs:
AUD/USD/NZD/USD cross There is no dollar in a currency pair trading currency mix called a cross, such as the British pound against the Swiss Franc.
The most active cross-currency pairs come from three non-dollar currencies: the euro, the yen and the pound.
A cross is a currency pair that does not involve the US dollar and is a more advanced currency pair option.
However, the importance of the dollar cannot be ignored in the analysis.
Take AUD/JPY and AUD/NZD as an example. The former is a typical carry trade. In addition to studying the interest rate spread and trade relationship between the two countries, it is also necessary to study the trend of AUD/USD and USD/JPY, as AUD/JPY has a large and obvious fluctuation.
As for AUD/NZD, Australia and New Zealand are sister countries with similar geographical and economic nature, which makes it difficult to form drastic economic differences between the two countries.
The trend of AUD/NZD is relatively stable, and it is difficult to have a clear upward and downward trend.
In the world, the US dollar is a very special currency, because most of the transactions in the foreign exchange market involve the US dollar.
As the world’s reserve currency, most agricultural and industrial commodities and the vast majority of international debt are also denominated in dollars.
In addition, almost every country’s currency is quoted in relation to the United States dollar as the base rate, and other rates are calculated by conversion.
The most fundamental reason for these situations is the dominant position of the US economy in the world, as well as its strong economic power and the core position of global trade.
Doo Prime foreign exchange currency pair trading platform also notes that due to the particularity of the US dollar, direct trading bears the vast majority of the global foreign exchange trading market.
The choice of currency pair should usually depend on the trading habits and types of investors, such as new traders, or experienced traders?
Is it a radical or a conservative?
Is it a long term, or a day ultra short?
Newbie trading forex currency pair: For newbie, the US, EU, British pound, Japanese yen and Swiss franc are your best choice.
In addition, since the direct trading, these currencies have strong liquidity, small spread, and usually obvious trading signals. Now, the matching development of these currency pair tracking systems is relatively mature, and novices have more references in the trading, which is very conducive to the novice traders to achieve efficiency under the condition of limited costs.
Those with some experience trading forex currency pairs are better suited to cross trades, i.e. those that do not include the US dollar, such as EUR/JPY, GBP/JPY and AUD/JPY.
They are also a favorite of trend-following traders because of their wide spread and trading characteristics that require a lot of analysis and judgment in order to assess the direction of the market.
Aggressive currency pair traders: Aggressive traders prefer currencies from emerging or developing economies that are less heavily traded, such as the Thai baht (THB), the South African rand (ZAR), the Turkish lira (TRY), the Mexican peso (MXN), and the Singapore dollar (SGD).
These currencies have low liquidity, low trading volume, wide spreads, and high volatility due to rapid market changes, which makes trading in these currencies very expensive and difficult, but also brings better opportunities and space, so experienced radicals love to trade objects.
Ultra short-term FOREx currency pair traders: Day and ultra short-term traders usually need currencies with a high daily trading range, so they usually prefer currencies with high daily trading ranges such as EUR/USD, USD/CHF, and GBPUSD.
