How to Focus on Major Currency Pairs in Forex Trading - Forex Prop Firm

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Best Forex Traders

Trade of Major currency pairs in the Forex Trading Industry can give you some great trading benefits. In the market’s uncertain conditions due to high and low volatility periods, Best Forex Traders choose the strategy of focusing on major currency pairs as it gives them trading advantages.

Let’s discuss the following things in this guide. 

What are Major Currency Pairs?

Major currency pairs are mostly the currencies of the world’s top economies. They are traded most in the forex market.

Major currency pairs can be a key to successful trade because of high liquidity, which means they are very easy to trade and less prone to fluctuations in exchange rates because of their significant sizes.

Because of high liquidity, major currency pairs become the favorite of best forex traders especially in low volatility forex markets

How is Trading of Major Currency Pairs Beneficial?

Major currency pairs are considered “Major” due to all the following reasons.

High Liquidity

As we’ve told you, Major Currency Pairs have high liquidity. How does high Liquidity benefit traders?

Volatility

Volatility is essential to trade in the forex market and like the best forex traders you should know how to capitalize on trading profit in both times, the high and low volatility period.

Exotic currency pairs are highly volatile, the price swings are great and risk levels are high. Major Currency Pairs are less volatile, they have amazing profit margins and fewer risks. Even when the trading conditions are not favorable for example at times of geopolitical events, trade with major currency pairs doesn’t go wrong.

Let’s have a quick comparison between Major currency pairs and exotic currency pairs.

CriteriaMajor Currency PairsExotic Currency Pairs
LiquidityHighLow
SpreadsNarrowWide
Market DepthGreaterLimited
VolatilityModerateHigh
Trading OpportunitiesAbundantLimited

Accessibility

The Best thing about major currency pairs is that they are greatly Accessible to all the traders, in every corner of the world. 

Whether traders with years of experience or traders who are just beginners, both of them can plan trading strategies with major currency pairs and can gain great profit.

Major currency pairs can make you the best forex trader if you implement your trading plans right as they offer a level playing field to everyone in the market.

How to Trade Major Currency Pairs Efficiently?

Mind-blowing Trading Plan

If you opt for trading major currency pairs, a mind-blowing trading plan is inevitable. Align your desired targets and determine a goal. Take calculated risks and make real-time decisions to boost your trading profit. 

Make effective strategies about entering and exiting trades, and use trading tools and resources to become one of the best forex traders.

Analyze Forex Market Technically 

To trade with Major Currency Pairs, you need to analyze the forex market with great assiduousness. 

Technical analysis is a valuable aspect that can take your trading potential to an upgraded level. Analyze charts, trends, resistance, and support levels to monitor your trade more efficiently.

Stay updated with forex market news and economic events that can impact trade so you can have your trading master plan.

Risk Mitigation

With the trade of highly liquid major currency pairs, you can reduce the risks of loss in the forex market. Due to the mass trading activity of major currency pairs, there are fewer risk chances. You should use stop-loss and take profit orders to protect your trading capital. Moreover, make sure not to overtrade to avoid any unnecessary risks.

Some Major Currency Pairs and Related Facts:

Currency PairDescriptionRelated Facts
EUR/USDEuro against the US DollarConsidered the most traded pair
USD/JPYUS Dollar against the Japanese YenKnown for its liquidity and volatility
GBP/USDBritish Pound against the US DollarInfluenced by UK and US economic data
USD/CHFUS Dollar against the Swiss FrancOften used as a haven currency
AUD/USDAustralian Dollar against the US DollarInfluenced by commodity prices
USD/CADUS Dollar against the Canadian DollarAffected by oil prices and US data
NZD/USDNew Zealand Dollar against the US DollarInfluenced by the economy of New Zealand
USD/SEKUS Dollar against the Swedish KronaReflects economic conditions in Sweden

Conclusion

Gaining profit by Focusing on the trade of major currency pairs is a lucrative strategy for forex traders because of its proven results. Understand the significance of these pairs and implement Effective Trading Strategies to maximize your trading performance and achieve great milestones.