Selecting a currency pair.

When starting to trade on the Forex currency market, the first step is to choose the trading instrument that will generate profit. Each trader makes this choice based on their own criteria.

For example, Americans and Japanese traders prefer to trade their national currencies, or more precisely, pairs that include them. Some focus solely on the spread, while others simply choose the most popular trading instruments.

The choice of a currency pair, based on generally accepted criteria, is based on such indicators as liquidity, volatility, spread size, swap commission size, availability of technical analysis tools and automated trading programs.

The main thing in this matter is that the instrument you choose should correspond to your trading strategy.

Let's move on to an analysis of the most important points.

• Liquidity - that is, how much a given trading instrument is in demand, in simple terms, this is the popularity of currency pairs. By using popular currency pairs, you can be insured against delays in order execution, since your request will always find a counter one. The spread size also depends on liquidity; the higher the liquidity, the lower the broker's commission and vice versa.

• Volatility in Forex is also a fairly significant indicator, because the more points a currency pair moves in a day, the more significant your profit will be. But some traders, on the contrary, prefer to work with calm trading instruments.

• Spread size - this indicator is of greatest importance if you trade using scalping. Since there is a maximum ratio of your own deposit to the trading volume, the weight of one point can be up to 5% of the trader's deposit.

For the most popular pairs, its size ranges from 0.3 to 5 points, a difference that can sometimes significantly affect the outcome of transactions.

• Swap - if you are trying to close all transactions within one day, you should not focus on this point. But if you plan to have transactions lasting more than 24 hours, the swap commission can cost you a couple of dollars or, conversely, add a certain amount to your profit, depending on the currency pair and the direction of the transaction.

• Advisors and indicators - as a rule, they are written for the most commonly used currency pairs, so if you want to use such programs, it is better to choose the most popular trading tools.

As you can see, it all comes down to trading popular currency pairs. They offer the most favorable trading conditions and provide the most useful information. Therefore, the best pairs to choose from are USDJPY, USDCHF, USDCAD, GBPUSD, GBPJPY, EURUSD, EURJPY, and AUDUSD.