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As a beginner in the Forex markets, one of the first decisions you’ll have to make is regarding the best currency pairs to trade. There’s a lot of debate about this critical decision, but the consensus is generally that you should trade only one Forex pair when you are just starting out as a trader. This allows you to focus your energies on learning the nuances of one particular pair, instead of trying to juggle between two or three different pairs.

You might think that it’s more profitable to trade multiple pairs, after all your opportunities are multiplied and you’ll get a lot of “action”. That said, you’ll also have to stay on top of all the different high impact news items for each currency, as well as manage the multiple open trades that will be rising and falling simultaneously. Trust me when I say that it’s a real headache, and you can choose to go down this path much later on in your trading career, but at the start you should just focus on the one.

So if you could only choose one Forex pair, which one would you choose? In this article, I’ll give you a brief overview of the best currency pairs to trade as a beginner, as well as highlight the pros and cons of trading each one. That way you’ll be able to make an informed decision about this very important consideration.

The Best Currency Pairs To Trade As A Beginner

As a beginner, I would suggest that you stick to the major pairs because they are the most liquid, the most active and will cost you the least amount in spread. You’ll want to have a liquid pair so that the price movements are fairly continuous, and you won’t have any problems filling in your order at the price that you’ve specified. The most frustrating thing that you will encounter with the more illiquid currencies is not getting your order filled and then having to alter your order on the fly and potentially miss a very profitable trade if it runs away from you. All the majors tend to have liquidity on their side, so stick to them and you won’t go wrong.

The best currency pairs to trade for any beginner are the EUR/USD, GBP/USD and the USD/JPY, which are three majors that are highly liquid, very active throughout the trading day and have the lowest spreads among all the currencies. I’ve omitted the AUD/USD as it tends to be active only in the early Australasian session before quietening down and losing steam as the trading day progresses. Some might also be interested in the USD/CAD, but personally I’ve found it to be quiet and much less active than the three majors I’ve highlighted. Here’s a brief overview of the three.

Overview Of The 3 Best Currency Pairs To Trade

First of all, let me cover the EUR/USD which is an excellent all round pair to start with. It has the lowest spreads that you’ll find among the three, which fluctuates between 0.5 pips to 1.5 pips depending on your broker. It also tends to have nice, prolonged trends in both the intraday and daily timeframes, so there’s a potential for you to reap a lot of profits following the trends there. One thing you will have to watch out for when trading this pair are the high impact news releases from both the US Treasury and the various economies within the Eurozone as well.

Secondly, there’s the USD/JPY, which is a fairly stable currency pair to trade. The trends are far less pronounced here, but there are a lot more opportunities to trade the ranges and scalp some trades as the spreads are comparable to the EUR/USD. You can expect spreads of anywhere between 0.5-1.5 pips with the USD/JPY, and you only have the Bank Of Japan releases to contend with in addition to the US ones which is a plus.

Last but not least of the best currency pairs to trade is the GBP/USD. Traders will either love this pair or hate it, because of its inherently extreme nature. The GBP/USD tends to be much more volatile than the EUR/USD, with moves running in the 300-500 pip range happening in the matter of hours sometimes. There’s also the tendency for the pair to move a few hundred pips in one direction, only to snap back and reverse all of the movement and then some. So there’s a lot of profit that you can potentially make with the GBP/USD, but there’s a lot of potential for loss as well. One thing to note is that this pair tends to have a spread of between 2-3 pips, which is more than double of the prior two pairs.

The Best Currency Pairs To Trade For You

Ultimately, you don’t have to choose any one of these pairs right now. Go ahead and experiment with any one of them by opening up a demo account or a micro account with one of our recommended Forex brokers, and see how your strategy lines up with the underlying market. After trading e pair for a couple of weeks, you should have a good idea as to what the best currency pairs to trade are for you.