Learn to Trade

Which are the best currencies to trade?

Written by Manny Sinder

There are three main currencies groups which are;

  1. Major currencies
  2. Semi-major currencies
  3. Minor currencies

The major currencies belong to the major financial super powers of the world. These are, USD, GBP, EUR, JPY, AUD, CAD.

And though the CHF and NZD do belong to the first group, I personally add them to the second group along with NOK, SEK, SGD and HKD.

The third tier include the following currencies, CZK, DKK, HUF, MXN, TRY, ZAR, PLN, CNH, INR.

Other currencies I tend not to trade due to various factors which are not important for this article.

Now please do not be thrown by the titles of the three groups. These titles are generic titles but they do not represent the theory contained in these article.

I personally group together the second and third group and leave the first group as they are. I do this for the following reasons;

  • Group 1 is a group of currencies belonging to established economies where news and data is ‘more’ transparent than most countries and breaking news is more easily reachable. Furthermore, the currencies in this group have less volatility than the other group and are in many ways easier to trade. I call these the bread and butter trades when they face each other, i.e. USD/GBP or EUR/CAD
  • Group 2 is a bunch of currencies which are much more volatile than their counterparts in Group 1. Because of this behavioural  characteristic, these currencies can, when facing the currencies from Group 1,  make traders some great gains (or losses if you do not know what you are doing).

Though the bread and butter trades are a great way to practise your trades, they may not contain enough pips to to achieve your financial goals. Eventually, those of you wanting to make a larger income from the currency markets may eventually hunt for more pips than what the Group 1 currencies can offer on a daily basis – that is when the batch of currencies in Group 2 can represent a whole new appeal.

One very important point to remember; Different currency types behave in different patterns and therefore a change of strategies ‘may’ be required including the amount of money you bet with.

Image courtesy of by  Chai25182518 at FreeDigitalPhotos.net

About the author

Manny Sinder

Manny Sinder is a professional trader, entrepreneur and author. All articles written by the author are solely his opinion and do not intend to vindicate any named person or institutions mentioned.

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