Generating profits in forex trading requires two things: judging the direction of the market correctly and taking positions in the optimal time period。Although the latter is an important aspect of Forex trading, it is often overlooked。

When looking to trade in the Forex market, you need a market that suits your personal skills - a market where you can spot entry and exit points and survive fluctuations until the end.。

How to predict the movement of Forex currency pairs？

If someone tells you they can accurately predict the direction of the market, stop them。Any trader who is better at choosing these moves than anyone else is likely to keep quiet about it, and they won't be online trying to sell you their "signals."。

A common misconception among novice traders is that every trade has to win。Keep in mind that even a profit / loss ratio of just over 50% can bring you long-term profits。Accepting and cutting loss positions are essential elements of a successful strategy。

Different money markets have different characteristics, stemming from the basic characteristics that drive prices differently。As a result, you may easily find a trading entry point in one market and not in another。

Long-term position / short-term position

Assuming you trade based on the coin toss result, if 50 out of 100 trades are correct, you will at least break even。

However, this is not the case, most traders lose more money than they earn, everything comes from trade management。

"Operating for profit and reducing losses" is a popular mantra on Wall Street, best understood through a forex demo account.。Depending on the market, strategy and objectives, forex traders can hold their positions for minutes or years。A demo account can tell you which markets are best for long-term positions and which are not.。Check out the different Forex demo accounts and find the one that works best for you。

Demo account trading history may also indicate that your strategy works better in one forex market than in another。Again, this depends on the different characteristics of different FX pairs。

If you set a foreign exchange pair with high price volatility too tight, it may trigger a stop loss。However, if you prefer short-term "scalping" strategies, they may be suitable for your trading。

markets with lower volatility may be associated with longer, more moderate price changes。These low-volatility markets are ideal for traders who can't keep up with the daily routine of changing every minute.。

Similarities of Forex Currency Pairs

The next question is, what are the characteristics of different forex currency pairs？Before we discuss this in more detail, it is worth noting the general characteristics of Forex trading。

Liquidity

The greater the trading volume of a currency pair, the greater the liquidity。It is important to consider this for several reasons:

• Trading is cheaper - lower bid-ask spreads in more liquid markets。
  Reduce slippage - if someone else reaches the displayed price before you, the order to execute the trade may fail。This happens less often in busy markets。
  Transparency - it is more difficult for a single event or market participant to influence the market。
  Research and news - lower costs and greater transparency attract traders。Follow the crowd to find more free research and analysis。

non-directional

Since many traders entering the foreign exchange market have been exposed to the stock market, the difference between the two sets of price movements should be clear。

Stock price as a function of a firm's future revenue stream。As the long-term expansion of the global economy continues, the price chart roughly rises from the bottom left to the top right, with some volatility, correction and selling in the middle, but a long-term bias in one direction。

The foreign exchange market is different.。They represent the respective strengths of the two economies, and it cannot be assumed that the U.S. economy will be superior to the Japanese economy and vice versa。

As a result, prices will be driven by the fundamentals and technical characteristics of the market and can also easily fluctuate in both directions。

The price of the euro against the dollar in February 1990 was 1.215。Despite some medium-term price fluctuations, three decades later, in 2022, the price fell by only 0.1。However, now is a good time to trade the EUR / GBP pair as the rate is currently close to the upper end of its 5-year trading range.。

What are Primary, Secondary and Bizarre Forex Currency Pairs？

Most brokers will offer all or more of the following forex pairs。They fall into three categories: primary, secondary and singular。

Some of the major currency pairs are:

• Dollar and yen: 'Gopher "
  AUD and USD: 'Aussie "
  Dollars and Canadian Dollars: 'Loonie'
  New Zealand Dollar and US Dollar: 'Kiwi "
  Euro and USD: 'Fiber "
  GBP and USD: 'CABLE'
  Dollar and Swiss franc: 'Swissie'

Major currency pairs are popular markets for beginners and advanced traders, and these markets are the most liquid, with small spreads between bid and ask prices。High liquidity also allows for large position trading without causing significant price volatility。

Secondary foreign exchange pairs are often referred to as "cross-currency" pairs and do not contain U.。As the base currency of the global financial system, the U.S. dollar is classified as a major currency when trading with another important currency.。

• EUR / GBP - EUR / GBP
  CAD / JPY - Canadian Dollar / Japanese Yen
  GBP / AUD - GBP / AUD
  GBP / JPY - British Pound / Japanese Yen
  EUR / JPY - Euro / Japanese Yen
  CHF / JPY - Swiss Franc / Japanese Yen
  EUR / NZD - Euro / New Zealand Dollar
  EUR / AUD - EUR / AUD
  AUD / JPY - AUD / JPY
  NZD / JPY - New Zealand Dollar / Japanese Yen
  GBP / CHF - GBP / CHF
  GBP / CAD - GBP / CAD
  EUR / CHF - Euro / Swiss Franc
  EUR / CAD - EUR / CAD

Some of the bizarre pairings are listed below。Some brokers do not support all foreign currency pairs as market liquidity dries up。There are also market anomalies such as USD / HKD being the pegged currency。Linked currencies limit trading to a pre-determined and tightly managed price range。

• USD / SGD - US Dollar / Singapore Dollar
  USD / SEK - USD / SEK
  USD / HKD - USD / HKD
• EUR / TRY - Euro / Turkish Lira

Forex trading is a 24 / 5 business, so you need to choose a market that suits your daily activities。This article details the trading hours of the global foreign exchange market.。

The difference between foreign exchange currency pairs.

Trading virtual funds in person in a demo account is the best way to understand different markets and is a risk-free way to determine what can and cannot be profitable。

Forex trading is largely related to risk management。New traders with small accounts need to understand how to manage risk by setting stop loss points correctly and choosing the right forex currency pair。For example, in a $100 account with 65 stops and 0.01 micro-hand trading means 6..5% risk。

Trader's 6.5% risk is 6.$5 risk, which is great for a $100 account and a highly volatile market。A good risk management strategy should have a risk of 2% or less (20 points or less)。Traders should also use ATR (Average True Range) to measure market volatility。Starting with trading currency pairs with lower ATR in a demo or live account can help learn how to manage risk。

As market conditions change rapidly, we must remain vigilant at all times。What works for a while can fail, and "paradigm shifts" are the enemy of all traders。

• EUR EUR / USD USD - Hottest Forex Currency Pair。Volatility is relatively low, spreads are small, and there are a large number of technical trading settings。
  GBP GBP / USD USD - In recent years, the currency pair has become an indicator of the consequences of Brexit, with both smooth negotiations and controversial deals causing repeated spikes。
  NZD NZD / USD - A way to trade global risk appetite。Positive sentiment in the market led to the strength of the New Zealand dollar, while pessimistic forecasts led to lower prices.。
  USD USD / JPY JPY - usually associated with "carry trades"。USD / JPY can provide longer, smoother price movements, favored by momentum
  USD USD / CHF CHF - both are known as "safe haven" currencies。When the market fluctuates between "risk appetite" and "risk aversion," the two remain relatively consistent, and the currency pair is one of the least volatile。

Minor and exotic currency pairs - USD USD / ZAR South African rand, USD USD / WON won, USD USD / BRL Brazilian real and other emerging market currencies are at the end of high volatility.。Markets for these currency pairs typically have low levels of liquidity and the inherent risks of emerging market trading。While this doesn't mean you can't make a profit, entry level traders are not advised to start these trades。

Conclusion

It seems good to start trading from the main currency pairs and get detailed information about the different markets and currency pairs.。

Be sure to use a demo account for real-time market research。If you do not learn the basics through simulated trading, you may run out of money before completing the project。

Liquidity is a key consideration, but keep in mind that even major currencies have calmer times of the day。