Due to COVID-19, remote earning is trendier than ever. Forex is popular around the world, as it provides affordable market entry. Today, anyone can trade currencies online, monetizing knowledge. Top brokerages offer a wide range of instruments. Which should you pick?
The currency exchange is the largest financial market. Its daily turnover of 6+ trillion US dollars is spectacular. Traders analyze price changes for their chosen pairs and foresee future trends. Tools like the GBP/USD — chart online on https://trade-in.forex/gbp-usd-chart-online/ help those who rely on the strongest world currencies. But are they also the most profitable?
What Pairs Can be Traded
The pair with the US dollar and the British pound is a Major. This means it represents the robust financial systems of the developed world. They are more predictable than exotics. Emerging economies are more likely to experience sudden shocks, which make them less appealing. They are the least liquid.
Liquidity describes how easy it is for buyers and sellers to connect. Majors are the most liquid, as they are in high demand. They relate to the vastest trade powers. While Minors do not include the USD, they are still fairly liquid. The currencies they comprise (e.g., the Euro or the Swiss franc) represent strong systems.
Which to Choose
Majors are a default choice for many. After all, they are connected to economies widely covered by the media. The US dollar is the main reserve currency, and it is used for most international transactions. This currency adds liquidity to any pair. Moreover, Majors are associated with better trading conditions.
However, this does not mean trading them is always profitable. Losses are always possible. Those who lack experience and knowledge will err whatever they trade. It is vital to identify lucrative entry and exit points for each position. This brings us to a key point.
No Shortcut to Profit
Forex does not guarantee returns. Everything relies on your own skills and foresight. The rule of thumb is to choose combinations you understand best. This means that even exotics can be profitable. Consider the currency of your country, as you can access relevant news easily.
Most pairs include the US dollar. Thus, monitor the health of the American economy. Keep track of political events, such as presidential elections.
Some Popular Choices
Risk is an inherent part of Forex. If you want to minimize it, stick to USD/EUR.
● This pair is fairly predictable;
● it provides tight spreads;
● volatility is moderate, which explains the lower risk;
● news concerning both economies is easily accessible.
The USD/GBP combo offers more volatility. This means you could gain more from short-term changes. If you are ready to take more risks, go for it. Relevant economic data is not hard to find.