Which Currency Pairs Should a Beginner Choose?

Good day.
Each currency pair has its own specifics of behavior and movement, as well as its own nuances, which are recognized and understood by traders who have sufficient experience trading in the market. In fact, by focusing on trading currencies that a trader knows well enough, one can gain a significant advantage in trading.

Beginners, having just opened the terminal, either see nothing but EURUSD, or trade ALL available pairs. I suggest briefly going over the most well-known pairs and noting their characteristics. And at the end we will draw a conclusion about what a beginner should take into trading.

In a sense, if you know the characteristics of the instrument you trade in more detail, this gives you an advantage. Thus, if you are interested in obtaining additional information concerning the "mini-secrets" of pairs and currencies, then this article is for you. Below you will find a list of the general characteristics of the movement or behavior of currency pairs that I have noted.

This list is far from complete! Therefore, please do not hesitate to share your experience and thoughts regarding these characteristics by leaving your comments on this article!

It is no secret that the EURUSD currency pair attracts the largest trading volume in the currency market, and therefore this pair is the most frequently traded and has low spreads. Among other observations, I noted the following:

▪ The movement of the EURUSD currency pair is strongly influenced by news events, such as NFP, FOMC, and economic difficulties in the eurozone.

▪ Most of the movement of this currency pair takes place during the London session, but the pair usually does not show large movements during the day.

▪ The pair trades in an average daily price range.

▪ I noticed that for most of the trading day the EURUSD currency pair moves in one direction, and that it often prefers deeper Fibonacci levels.

Despite the fact that everyone immediately grabs at the euro-dollar, I would advise starting with GBPUSD, where the movements are more pronounced.

The GBPUSD currency pair likes to depict spikes on the chart directed upward and downward, and it is well known for its volatility and large movements. Among other observations, I noted the following:

▪ The pound shows its greatest movement during the London session;

▪ At the opening of the London session, the pound likes to show spikes directed upward and downward; false breakouts are often encountered at this time;

▪ Price likes to break through support and resistance lines, taking out stops;

▪ GBPUSD often pulls back to such deeper Fibonacci levels as 78.6 and 88.2;

▪ The daily price movement range is usually quite high;

▪ This pair likes to send spikes against the trend, and in these cases it is more attractive for trading against the impulse;

▪ Quite often there are news events on GBP that significantly affect this currency pair, but after the release of such news the market may remain calm;

▪ This currency pair is strongly influenced by news events such as NFP and FOMC, in a word, the same news that influences EURUSD

▪ I noticed that the beginning of reversals usually comes with choppy action, with corrections in price movement and far from immediately.

USDJPY is another currency pair that is strongly influenced by major news events concerning the U.S. dollar. Among other observations, I noted the following:

▪ When the USDJPY pair is in consolidation, it slows its movement extremely sharply and usually trades in an ultra-small range;

▪ When USDJPY is in a strong trend, it usually follows this trend without major pullbacks. This contributes to the continuation of its trend, sometimes showing pauses during which a small bearish or bullish flag is formed;

▪ In a trend, the typical Fibonacci levels for USDJPY are levels 23.6 and 38.2.

The AUDUSD currency pair is the opposite of pairs like GBPJPY or GBPUSD, since its movement is slower. Among other observations, I noted the following:

▪ The price will continue to be pushed in one direction, but along its path it will often encounter pullbacks, after which the trend will continue again;

▪ News events affecting the Australian dollar often have a major impact on all currency pairs associated with the Australian dollar;

▪ The AUDUSD pair, which shows a fairly large movement during the Asian session, also shows significant movement throughout the London and New York sessions;

▪ The Australian dollar is largely tied to commodities, Australian exports, and Chinese economic data (such as imports, exports, and manufacturing);

▪ We analyzed this pair in more detail in a separate video.

Main observations on this currency pair:

▪ The EURJPY pair also shows large movements: more than the USDJPY pair, but less than the GBPJPY pair;

▪ It is the most suitable for traders of all trading types, that is, it is universal;

▪ The EURJPY pair often displays chart patterns such as the bearish and bullish flag.

Main observations on this currency pair:

▪ The GBPJPY pair shows strong movements and has maximum volatility;

▪ In fact, the GBPJPY pair is probably the most volatile pair with the largest movements; thanks to the speed of its movement, it has been nicknamed the "Ferrari";

▪ Beginner traders are not recommended to trade this currency pair.

Key observations on these currency pairs:

▪ These currency pairs are characterized by large market moves, with prices rising rapidly and also falling just as quickly;

▪ These currency pairs are often in a trend that lasts for quite a long period of time.

Key observations on this currency pair:

▪ The USDCAD pair was nicknamed the "loonie," apparently because of its crazy up-and-down movements;

▪ Volatility in this currency pair is not as sharp, but it is connected to the release of oil news.

Key observations on this currency pair:

▪ It has historically shown a high correlation with the EURUSD pair;

▪ The franc often increases in value when traders are rapidly looking for a "safe currency."

Key observations on this currency pair:

▪ EURGBP is generally the slowest-moving currency pair with a low level of volatility;

▪ But despite its relatively minor moves, it does have occasional unpleasant spikes.

Since we do still live in Russia after all (at least most of this site's readers do), many people one way or another try to trade this pair. What you need to know:

For a beginner Forex trader, I would advise not taking more than 2-3 pairs into simultaneous work. Imagine that you came to study medicine and need to choose a specialty. You cannot be a dentist and a therapist and a gynecologist at the same time, right? Specialization matters.

If giving a concrete set, then take GBPUSD, USDCHF and USDJPY. These three pairs will let you try technical analysis and feel that each pair has its own peculiarities, as well as observe trending moves.

P.S. You can add your thoughts, comments, advice, considerations and much more below this post.

Respectfully, Pavel Vlasov TradeLikeaPro.ru