Trade Forex Trading

Best Currency Pairs for Day Traded in the Market

The daily turnover in the market is about $7. 2 trillion, and 95% of all trading activity is conducted by speculators seeking to make a profit. The majority of these trades are made up of the five major Forex currencies, which are the greatest currency pairings for intraday trading:

  • USD
  • EUR
  • GBP
  • JPY
  • CHF

These symbols stand for country currencies in three-letter codes. Forex uses this style for trading them. If new to it, know that USD means US Dollar, EUR is Euro, GBP is British Pound, JPY is Japanese Yen, and CHF is Swiss Franc.

Best Currency Pairs for Day Trading to Trade

USD is the most transacted pair

USD - 85% of all daily market transactions

EUR - 40 % of all

JPY - 20% of all

GBP - 13 % of all

CHF - 9 % of all

USA Dollar or USD - the United States dollar is the main currency of the world. It's used as the standard measure of all other currencies that are traded and transacted in the market. All others are in general quoted in terms of US dollar. The Best Currency Pairs for Intraday Trading are the ones which have USD, EUR, JPY and GBP.

Since many central banks keep the US dollar as a reserve, it is a safe-haven currency. The dollar will appreciate during a financial downturn because investors and traders buy it as a safe haven asset. On the other hand, people will seek for those that are higher yielding, such as the EURO, Pound, Swiss Franc, and Australian Dollar, when the economies are good.

The dollar is traded in the market with other major currencies, like the Euro, Japanese Yen, British Pound, and Swiss Franc.

The Euro, or EUR, is important worldwide because it's used by 17 countries in the EU Zone that are part of the European Union. Because the Euro represents 17 economies combined, it's the second-most traded currency after the USA dollar. The best currency pairs for trading within a day are those that include USD, EUR, JPY, and GBP.

Japanese Yen or JPY - Japanese Yen is the third most transacted in the world due to its liquidity. Japanese economy is the second biggest economy after the American economy.

The British Pound (GBP) ranks as the fourth most traded currency globally due to Britain's economy being the third-largest after those of the US and Japan, making it highly liquid.

The Swiss Franc (CHF) is the only major currency from a significant European nation that is not part of the European Union or the G-7 countries. Although the Swiss economy is relatively smaller compared to others, the Swiss Franc ranks among the five major currencies in the Currency Trading Market. This prominence is attributed to the robustness of the Swiss banking system and the stability of the Swiss economy, which results in a high demand for the Swiss Franc that surpasses its supply.

Both the Canadian Dollar (CAD) and the Australian Dollar (AUD) are traded within the foreign exchange market: however, due to their lower levels of liquidity, they are not classified as major currency pairs.

After classifying the currencies, there are 2 categories:

  • Major pairs
  • Crosses

Major Pairs - Best Currency Pairs for Day Trading to Trade

Currencies are traded and transacted in pairs of 2 e.g. EUR USD

The most favorable currency pairs for intraday trading, often termed major pairs, consist of the USD paired with one of the other primary currencies (EUR, JPY, GBP, or CHF).

The "Big Four," representing the four primary currency pairs in the Forex market, are: (Identifying the Best Pairs for Day Trading)

  • EURUSD
  • USDJPY
  • GBP/USD
  • USDCHF

These are the most traded because they have a high turnover and are the most profitable.

The following pairs are great for day trading: if you want to maximize profits, it is best to only trade these 4 major pairs.

Daily Trade Turnover of Currencies by Volumes

The USD is the most transacted, followed by EUR, GBP, JPY and CHF, the daily trade turnover volume taken up by each of the 5 in terms of percent is displayed below:

USD - 85 %

EUR - 40%

JPY - 20 %

GBP - 13%

CHF - 9 %

Since transactions are in pairs the total will be 200 %

For example the EUR/USD pair: EURUSD = 100% EUR + 100% USD

Best Currency Pairs for Intraday Trading

Calculating the aggregate share of the primary four currency pairings yields the following: 85 + 40 + 20 + 13 + 9 = 167 percent. It is important to recognize that these four pairs are composed of five distinct currencies contributing to this 167% total. This percentage share of the overall daily trading volume is precisely why these four specific crosses are designated and recognized as major currency pairs, often abbreviated simply as "majors." This substantial portion of the daily transactional turnover is also the primary reason these four pairs are considered the superior choices for intraday trading, particularly for those specializing in day-to-day market activity.

Hence volume for Majors is:

FX Major Pairs = 167 % of all turnover

Other Forex Pairs Combined = 33 % of all turnover

Best Currency Pairs for Day Trading to Trade: Because the major pairs are the most actively traded, many experienced investors only trade the majors because these are highly liquid and their market movement tends to be more predictable. This makes these majors; USD, EUR, GBP, JPY and CHF the best to analyze using technical analysis as they're the most liquid.

The Best Currency Pairs for Day Trading have more liquidity - The more the liquidity, the more the volatility, volatility means a currency is likely to trend in one particular direction & when the prices are heading in a given direction it is easier to make money as opposed to when prices are not moving in a given direction - range market.

On the other hand, minor forex pairs make up 33% of all daily turnover and are considered illiquid. This means they do not have much market volatility and most price movements are choppy or range-bound. Because of this, they are harder to analyze using trading studies. They often do not show clear market movements in one direction, making them not the best currency pairs for day trading.

For Example by just trading EURUSD then a trader will be participating on 85 + 40 = 125% of all turnover volume, which's two-thirds of all transactions. This is another reason why some just stick to the EURUSD alone - one of the Best FX Pairs for Day Trading.

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