Making profits in the forex markets is not always easy. It is made harder when a forex trader makes the wrong choices of currencies to trade in.

A common mistake made by novice traders is that they try to monitor and trade so many currency pairs at the same time.

Not only does this make trading complicated and difficult to handle, it also denies the trader the opportunity to gain intimate or in-depth knowledge of each currency pair and their unique characteristics.

Every forex trader needs to understand that each currency pair reacts differently to economical and political events.

Thus, it is necessary for a beginner to only study one currency pair at a time to enable study and observation of the pair and to determine the most effective trading strategy.

Major Currencies

There are so many currency pairs to choose from when you enter the forex market.

However, as a beginner you need to trade in currencies that have high liquidity, that are actively traded at high volumes, that have pre-set trading systems that you can easily follow, and that have very low bid/ask spreads.

The currency majors are the currency pairs that fit that kind of profile. These are pairs such as the EUR/USD, GBP/USD, CHF/USD, and USD/JPY.

These currencies receive the highest trade volumes especially during the most traded session which is the New York market trading session (8:00 a.m. to 4:00 p.m. EST).

Cross Pairs

The following are the most traded currencies in the world:

• American dollar (USD)
• Euro Zone Euro (EUR)
• British Pound (GBP)
• Swiss Franc (CHF)
• Japanese Yen (JPY)
• Canadian Dollar (CAD)
• Australian Dollar (AUD)
• South African Rand (ZAR)

It is important that new forex traders only focus on a pair involving the following currencies.

If you have one of the above currencies paired against another currency not in this list, then you will be dealing in a complicated pair which may likely land you in loss.

These currencies when paired together without the USD forming part of the pair are referred to as cross pairs. They offer high liquidity and tight spreads and are much easier to study and master.

What Currencies to Avoid As a Beginner

As a beginner, you need to trade in currency which is easy to study, is readily available in the market (high liquidity), and charge the lowest spreads.

This means it would serve your interests best if you avoided currencies not featured in the above list of cross pair currencies.

Such currencies not mentioned are known as exotic currencies and are highly unpredictable as they exhibit dangerously high volatility.

Moreover, it is even difficult to find established and trustworthy brokers who offer exotic currency pairs for trade.

These currency pairs are best left to expert traders who have studied the particular currency for a long period of time.