Types of currency pairs

Not all Forex profit instruments are created equal. Currency pairs can be roughly divided into three groups, each with its own characteristics.

Knowing these allows you to choose the trading instrument that best suits your needs and perfectly fits your strategy.

Forex currency pairs are categorized based on their popularity and spread size—these two parameters play a decisive role.

Group 1, the most popular.

The leaders in forex trading volumes are EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF, and USD/CAD.

It is for these currency pairs that the smallest spread size is observed from 0.1 to 4 points depending on the market situation, they are excellent for scalping and almost all other Forex strategies.

Group 2, average popularity.

These currency pairs are no longer in such demand, but the volume of transactions carried out on them still accounts for about 25% of the total market share.

The main participants of this group were EUR/GBP, EUR/JPY, EUR/CAD, EUR/AUD, EUR/CHF, AUDJPY and some others currency pairs.

The spread size for this group already increases significantly from 1 to 7 points.

Group 3, exotic.

Despite its name, it includes pairs such as USD/RUB, USD/LTL, USD/MXP, USD/NOK, USD/PLN, EURCZK, EUR/HUF, and similar trading instruments. This isn't to say that such options aren't popular on Forex, but the volumes of trades involving them are comparatively small.

Low liquidity is the reason for the high spread - from 4 to 80 points.

Some Forex dealing centers and do not work with such trading instruments at all.