How to choose a perfect currency pair?

<p>Certain criteria and characteristics of currency pairs will help you pick up the most suitable ones. The peculiarity of the currency market is its extremely high liquidity; hence, this parameter may be neglected as there is always supply and demand. The following three criteria could be among the most important ones:</p><p><strong>Volatility</strong></p><p>The higher the volatility of a pair, the larger the possible profit; however, Stop Losses must also be high.</p><p><strong>Time of activity</strong></p><p>Each currency pair has the time when it is most active. This is the time when trade volumes are the largest, and the price might move significantly.</p><p><strong>The cost of a trade</strong></p><p>In Forex, normal expenses are the spread – the difference between the rates of a buy and sale. On advanced ECN accounts, the spread is minimal, but they feature a small commission fee for operations. As a rule, major pairs have minimal spreads, the spread of cross courses is a bit higher, while exotic pares feature increased spread.</p>

<p>One of the most important things in trading is picking the right currency pair, combined with the right trading strategy. Choosing correctly has the potential to make a huge profit, while choosing the wrong pair will lose money. First, identify whether the pair is a trending or non-trending pair. Second, figure out what type of strategy you will be trading. Finally, you want to know the average true range of that pair (which means how much the pair moves on a day-to-day basis).</p>