Forex trading is a popular investment option because it provides traders with the opportunity to earn significant profits. However, with over 80 currency pairs available to trade, it can be challenging to determine which ones are the best to trade. In this article, we will explore the two best forex pairs to trade and why they are so popular among traders.
1. EUR/USD
The EUR/USD is the most popular forex pair and accounts for approximately 30% of all forex trades. This currency pair is the combination of the euro, which is the currency of 19 European countries, and the US dollar, the currency of the United States. The EUR/USD is highly liquid, which means that traders can enter and exit trades quickly without experiencing significant price slippage.
One of the reasons why the EUR/USD is so popular among traders is that it has a tight spread. The spread is the difference between the bid and ask price of a currency pair, and it represents the cost of trading. A tight spread means that the cost of trading is low, making it easier for traders to make a profit.
Another reason why the EUR/USD is a popular forex pair is that it is highly correlated with other major currency pairs. This correlation means that traders can use the EUR/USD as a barometer for the overall strength or weakness of the forex market. Additionally, the EUR/USD is influenced by major economic events and news releases, making it an excellent pair for traders who prefer to trade on fundamental analysis.
2. USD/JPY
The USD/JPY is the second most popular forex pair and accounts for approximately 17% of all forex trades. This currency pair is the combination of the US dollar and the Japanese yen, and it is often referred to as the “ninja” pair. The USD/JPY is highly liquid, making it easy for traders to enter and exit trades quickly.
One of the reasons why the USD/JPY is so popular among traders is that it has a low spread. A low spread means that the cost of trading is low, making it easier for traders to make a profit. Additionally, the USD/JPY is influenced by major economic events and news releases, making it an excellent pair for traders who prefer to trade on fundamental analysis.
Another reason why the USD/JPY is a popular forex pair is that it is highly correlated with other major currency pairs. This correlation means that traders can use the USD/JPY as a barometer for the overall strength or weakness of the forex market. Additionally, the USD/JPY is popular among traders who prefer to trade on technical analysis because it often exhibits clear trends and patterns.
Conclusion
In conclusion, the EUR/USD and the USD/JPY are the two best forex pairs to trade. These currency pairs are popular among traders because they are highly liquid, have tight spreads, and are influenced by major economic events and news releases. Additionally, these pairs exhibit clear trends and patterns, making them popular among traders who prefer to trade on technical analysis. However, it is important to remember that forex trading involves a significant amount of risk, and traders should always conduct thorough research and analysis before entering any trades.
