The Major Currencies in Forex Market
There are currently eight major base currency pairs in the forex market, and the following are their symbols: USD, GBP, EUR, CHF, CAD, AUD, NZD, JPY. The most common forex pairs are a combination of any two of those eight symbols.
Different currencies in Forex Trading
Currency trading is popular because small investors can easily buy into the market. There aren’t any transaction fees on currency trades, and you can trade at your convenience because the foreign exchange market is open twenty-four hours a day, five days a week.
Forex is the single largest and most ambiguous market in the nation, with hundreds of currency combinations available, including forex major and minor pairs. Having said that, what are the 5 major currency pairs in forex?
EUR/USD (euro/United States dollar)
According to the 28 major forex pairs list, the euro/United States dollar was the most traded currency pair on the market. In 2019, it made up 24.0% of daily forex trades. The currency pair is favored mainly because they come from two of the biggest economies in the world: the USA and the European single market.
GBP/USD (British pound/U.S. dollar)
The pound sterling is another major currency in forex that pairs with the United States dollar. This pair accounted for 9.6% of all daily forex transactions.
AUD/USD (Australian dollar/United States dollar)
The Australian dollar is sometimes referred to as the “Aussie.” Against the US dollar, it made up 5.4% of daily forex trades.
USD/CAD (US dollar/Canadian dollar)
USD/CAD, or the “loonie,” represents the pairing of the US dollar and the Canadian dollar. Because the loon bird is on Canadian dollar coins, people often refer to the CAD as the “loonie.” Since oil is Canada’s main export, the value of the Canadian dollar is directly tied to the price of crude.
Common Currency Trading Mistakes
Like learning any new skill, you won’t master currency trading overnight. You will make a few mistakes; you can expect that as a beginner. Anyone can tell you that mistakes or failures are one of life’s biggest teachers. You might commit the same errors as other new traders do. With that in mind, here are a few of the mistakes you should avoid:
Trading without a proper strategy
Before you make your first trade, you must understand the terms in forex trading. It will help you determine your strategy. The strategy should show how you will handle losing or winning a trade. Without a trading strategy, you only increase the risk of losing money.
Disregarding risk management
One of the key components of a successful trading strategy is risk management. Stop loss tools can help you reduce massive losses. Traders are wise to have a stop loss for each trade.
Risking it all
Because inexperienced traders do not fully understand the fundamentals of position sizing and leverage, many take on more risk than they can afford. You can lower the risk of losing money by becoming knowledgeable about forex trading, and the strategies attached.
Don’t allow emotions to dictate a trading strategy
No one likes to lose. It is not a good feeling, but it is inevitable in forex trading. Winning every trade is not a realistic goal, but being able to accept the downfalls will help soften the blows. However, when you take an “L,” it’s crucial to stick to your game plan. Don’t let your feelings overpower you and distract you from your trading plan.