There are many things that make foreign currency exchange market appealing to traders and investors. Until very recently, it had a restricted access, and trading on it was available only to financial institutions. It’s a market that is constantly open during the week and has participants from every country in the world. The basis of any trade is the pairing of two currencies. Major currencies, which are often the strongest ones, are most frequently traded. That does not mean that such pairings are the best for profiting on the market, as they also have inherent risks and fluctuations.
- Not surprisingly, the most dominant and strongest currency, as well as the most widely traded, is the US dollar. The reason for this is simply the sheer size of the US economy.
- The values of these major currencies keep fluctuating according to each other, as trade volumes between the two countries change every minute.
- The aforementioned pairs tend to have the best trading conditions, as their spreads tend to be lower, yet this doesn’t mean that the majors are the best Forex trading pairs.
“For the buying and selling of currencies, you need to have information about how much the currencies in the pair are worth in relation to each other.”