Best Currencies for Forex Trading

The foreign currency market, or forex as it is more commonly known, is becoming an increasingly attractive venture for those new to financial trading.

Whilst forex offers many advantages not possible with conventional stock dealing, such as making a profit even when prices are falling, there are so many options to take into account that it can be bewildering for novices to know where to start.

Many brokers offers in excess of 80 different forex pairs and knowing the best pairs to trade without much experience under your belt can be difficult. However, picking the currencies to trade is a very serious business and can mean the difference between becoming successful or finding the market to difficult to follow.

Forex has several currencies that are known as `majors` and these are the ones which are recommended for novices. Those included in the list of majors are the US dollar, sterling, Canadian dollar, Japanese yen, Australian dollar, Swiss franc and the euro.

Whilst the market does offer the option to trade in a long list of currencies and the more exotic ones may seem like a more glamorous option, these are best avoided until a considerable amount of experience has been gained. This is because there is not as much information to be found on these currencies and they may move in a very different way to the majors. They therefore require indepth research before a position is opened.

Another reason why exotics are best left to experienced traders is because the spreads are often far larger and this is another sign that a pair should be avoided. Traders with less experience should look for a currency pairing with a low spread, because these tend to be less volatile with less prolonged spikes. These two factors mean they are easier to trade.

Whilst any pairing from the majors should be relatively easy to adopt to start with, the EUR/USD or GBP/USD are two trades that are worth a special consideration. The former is one of the most popular pairings in the market, with a rock bottom spread and one of the least risky positions to trade. Many experts believe it conforms very well to technical analysis, whilst fundamental experts agree that there is a wealth of information available from the global coverage of these two international heavyweights.

The latter is a slightly riskier option and can be viewed as more volatile, but it remains an option for new traders. One of the reasons why it is a recommended pairing for newbies is that it is the subject of plenty of market research, making analysis far easier to carry out.

However, it is essential that anyone new to the trade does not go overboard in selecting which currencies to start with; it is recommended that just one pairing is picked at first. Every currency has its own individual way of moving and responding to global events and it can take some time to learn. Having several currencies on the go at once can dilute the learning experience and prevent sufficient notice of being taken of key indicators.

Success in forex currency trading can be achieved by anyone, but anyone hoping to make a million overnight is likely to be disappointed. Patience and a slow and steady approach are the two most essential factors to prevent a total wipeout and will gradually build a healthy balance in your account.

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