What are currency pairs?

We use moving average for that purpose. Beginners are often advised to use an exponential moving average instead of a simple one as the former lags less i. We verify that as well by applying the calculations to both simple and exponential period moving average. All calculations are repeated on three timeframes: daily, weekly, and monthly. All currency pairs are analyzed using the data of 69 months between and We can calculate the positive or negative net change in the exchange rate of a currency pair in a given day, using the following formula:.


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We rank the currency pairs using absolute value as the quantum of rate change is studied. Since the exchange rates of currency pairs differ significantly e. As mentioned earlier, the above formula is a crude method of analysis. However, it gives us an idea of probable net movement in a currency pair. The weekly and monthly Open and Close data can be substituted in the above formula to identify the average probable rate change in a given week or month.

The table above clearly reveals that the yen-based currency pairs trend more than other pairs. The weekly trend chart reveals a similar situation. The monthly statistics is not very different. Notably, the top three places are occupied by the same currency pairs on the daily, weekly, and monthly charts. The fourth to tenth ranks reflect the order in the average daily rate change ranking list. The weekly volatility graph paints a similar picture.

From the rest of the pairs, the daily and weekly average volatility rankings are alike. The monthly average volatility data does not provide any surprises. The daily, weekly, and monthly volatility data indicate that the same currency pairs occupy the top three places. Similarly, the same currency pairs occupy the fourth to seventh positions in the daily, weekly, and monthly volatility ranking list. One of the most elementary methods to detect Forex trends is to use a moving average. We calculate the average and median number of consecutive closes above and below a period daily, weekly, and monthly moving average SMA and EMA.

However, their averages are only Additionally, a pair has to close above its open level for a rising trend and below its open for the falling trend. Notably, all three best pairs here are quoted in the Japanese yen. The yen continues its domination in the list of best trending currency pairs on the weekly chart as well. Our research has revealed the following facts based on the studied period of 69 months:. The behavior of a currency pair as identified in the study may or may not hold good because the past performance is not an indication of the future performance.

However, our humble research can certainly serve as a starting point for traders looking for a suitable currency pair to trade on daily, weekly or monthly charts.

Tags: currency pairs , Forex science , statistics , trend. Awesome research, thanks for sharing, any schedule for updates, maybe ever 6 months? Be interesting to see any underlying changes. Hi, Thank you for your fantastic research. Can you tell us how we connect that with Renko? I developed a good strategy with Renko and range-bound pairs adjusting the bricks width with Center of Gravity. I think if I use it with trendy pairs it will make more success with some adjustments.

Can you tell me your thoughts in using Renko with trendy pairs?

Which Currency Pairs Should I Trade?

Andriy Moraru Reply: December 6th, at am. I am not a big fan of Renko charts and do not use them in live trading. Note that due to the uncertainty around Brexit, this pair may experience high volatility. But, the critical point when this currency pair got a boost is after the fall of the Bretton Woods Agreement, and in the s this currency pair saw volatility that it had never seen before. The factors that affect this currency pair the most are the economic ones, but also the political situation.

Also, the Bank of England Monetary Policy Summary reports each month on the interest rates movements, which has an impact on the decision of investors in their investment projects. Of course, the forex market is open 24 hours, but there are certain times when this pair experiences higher volumes.


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Although the Bank of Canada does not directly affect the currency, it does issue some policies that promote economic growth and influence currency movements. Canada has good trading relations with the USA, which has helped to maintain a good position of its currency in the forex market. Note that Canada is a leading exporter of oil and grains.

This trading pair, otherwise known as "Aussie" has excellent liquidity and offers many opportunities for daily trading. Australia's economy is strong, and Australia has good trading relations with the United States.

Selecting Trending Currency pair for Forex Trading

These relationships affect the price movements of this currency pair. The Reserve Bank of Australia reviews the interest rate every month, which has an impact on the movement of the currency pair. Since the Swiss franc CHF does not belong to the currencies with the highest volatility, the economic stability of Switzerland has enabled this currency to ensure a good trading position in the forex market. Switzerland is otherwise known as a "banking country" and has strong bank policies that can affect the price of its Franc currency CHF. Franc CHF has the same characteristics as the pound sterling in terms of volatility, price movement and technical part.

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This is another popular and profitable forex pair to trade. Interestingly enough, in forex, the Swiss franc is also considered a safe haven - just like the US dollar. New Zealand may not be a big country, geographically. New Zealand is known as a country that exports agricultural products. But also rising prices for agricultural products globally could affect the value of NZD. As a result, the pairing between the New Zealand dollar and the US dollar is highly popular in forex trading.

The Euro EUR had emerged as a digital currency in its infancy, but it is now the official currency of most countries on the European continent. This forex pair is highly popular, perhaps one of the most traded ones across the world. After all, the euro is used in many places across Europe. That being said, the uncertainties around Brexit may impose different obstacles on the British pound.

Hong Kong's economy is one of the best in Asia, and it is deservedly viewed as one of the significant countries where innovation and development have taken place, thus being one of the hubs of the Pacific Rim. Although this pair might have low volatility, predictable movements make it preferable among traders. This pair is also highly popular to trade. South Korea is known as a country with high tech cities, such as the capital Seoul.

Which Forex Pair Trends the Most

The value of the currency depends on the economic situation and economic growth in the country. The South Korean Won has had a ton of changes in the twentieth century, including having fixed trade rates on different occasions. Yet, the current gliding esteem was activated in and followed quickly by a sharp depreciation.

Pick the Most Profitable Forex Pairs to Trade Daily

As we can see there are different currencies and forex pairs to trade. Having an understanding of the top 10 forex pairs to trade is crucial to help you make profitable moves. Besides, this pair often has the lowest spread among many brokers. At the same time, there are recognized countries and territories, so traders should not limit their choices to popular pairs. Proper technical and fundamental analysis, as well as market news and economic announcements, can help traders master the art of forex trading.

Whether you choose to trade majors or exotic pairs, do not forget that in order to succeed in forex you have to invest in proper forex education. The good news is that there are numerous online courses, books, and seminars that can help beginners establish a profitable trading strategy and succeed in forex. Having a reliable platform and a likeminded network is also crucial. Last but not least, any trader should create a successful trading routine.

No matter if you decide to trade currency pairs part- or full-time , you should find a balance between work and lifestyle to create a mindset that can lead you to financial success. Now you know the top 10 best forex pairs to trade. Join eToro and discover how simple and intuitive it is to trade and talk Cryptos, Forex, Stocks and Indices.