Another Monday morning, another surge in precious metals. Gold wasted absolutely no time pushing to a fresh record high of $4,600 per ounce this morning, once again opening the session with a sizeable gap. The same is true of silver, which opened over $80 per ounce and immediately pumped to $84, matching the record high from two weeks ago. Platinum and palladium were also in bid this morning, although remain short of the highs achieved in 2025. The situation in Iran appears to be the driving force behind the rise in precious metals this morning, as sweeping anti-government protests intensified over the weekend, culminating in hundreds of deaths according to some reports. President Trump said that Washington is considering “some very strong options” regarding the ongoing developments, but also confirmed that the Iranian leadership is willing to negotiate following threats of US military intervention. Recent events have also driven crude oil prices higher, although in the grand scheme of things the price action is hardly anything to write home about. The Brent Crude index managed to push back over $63 per barrel this morning, while WTI lags at around $59. Bitcoin meanwhile is showing minors signs of life today, but remains largely unfazed by such worldly affairs. The US Department of Justice has served the Federal Reserve with grand jury subpoenas, threatening a criminal indictment relating to the Fed Chairman’s testimony last June, according to a statement released by Jerome Powell late last night. The testimony in question relates to the project to renovate historic Federal Reserve buildings, estimated to cost around $2.5 billion, a figure that drew its fair share of criticism at the time. For many however, including Jerome Powell himself, the reasoning behind such legal pressure is almost irrelevant. In his statement, the Fed Chairman made it very clear that the latest action was merely a pretext, saying that the real reason the administration is going after the Fed is because of the interest rate decision made over the course of last year. President Trump has long criticised Jerome Powell for not lowering rates quickly enough, and the latest action against the Fed will be viewed as move to put more pressure on the central bank. The dollar is currently reacting poorly to the news, pushing the DXY back below 99 early this morning. A reminder that although Powell’s chairmanship expires in May, his membership on the board of governors continues until January 2028. Very little on the economic calendar today, but Tuesday promises to deliver several interesting data points in the form of US inflation data, as well as some long-overdue home sales figures. On Wednesday, China will publish its latest balance of trade data, while later in the day the US will publish October and November PPI figures, followed by November retail sales – the backlog has not been cleared just yet. Thursday closes out the week with UK and German GDP data, as well as the regularly scheduled US jobless claims. The earnings calendar will perk up a bit this week, particularly for the financial sector, with JPMorgan Chase (JPM) reporting on Tuesday; Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C) reporting on Wednesday; Goldman Sachs (GS), Morgan Stanley (MS) and Blackrock (BLK) reporting on Thursday. Taiwan Semiconductor (TSM) also reports on Thursday. #CrudeOil #Gold
Starting later today, Bloomberg and Standard & Poor’s will begin the annual process of rebalancing their respective commodity indices. Such readjustments are a routine occurrence, but are likely to be more significant this year, reflecting the extreme price increases seen in precious metals in 2025. The new weightings for gold, silver, crude oil and other commodities will be adjusted in accordance with predetermined rules, potentially forcing larger institutional players into submitting sizeable trading orders over the next few days. The selloff in silver over the last couple of days is likely a pre-emptive defensive move ahead of such adjustments, which will last until mid-January. From highs of $82 per ounce just two days ago, silver explored lows of $73 yesterday before closing higher. The white metal appears equally indecisive today, as do precious metals in general, with the exception of gold, which is displaying admirable stability around $4,460 per ounce. US stocks are patiently awaiting non-farm payrolls later today, which represents the last piece of the puzzle with regard to last year’s labour market. Wednesday’s ADP print came in close to expectations, provoking little reaction from financial markets, but today’s NFP drop could well swerve clear of analysts’ predictions. Another potential bump in the road is the Supreme Court’s decision on the legal status of the recent tariff measures imposed on the United States’ trading partners. The court is set to deliver its verdict later today, and while it does not have the ultimate say on the matter, the resulting legal wrangling could confuse and delay the implementation of import duties for months to come. A combination of different events pushed crude oil prices higher yesterday, lifting the Brent Crude index over $62 a barrel and WTI up to $58. The US seized a number of Venezuelan tankers on Wednesday, as part of the effort to contain oil exports from the South American nation. In the Middle East, the Iraqi government recently approved plans to nationalise the West Qurna 2 oil field – one of the largest oil fields in the region. Meanwhile, across the border, sweeping protests in Iran have oil markets on edge because of Trump’s promise to intervene on behalf of peaceful protestors. Nothing concrete as of yet, but a direct intervention by the US military will obviously have far-reaching consequences for oil delivery in the region. #NFP #Metals #CrudeOil
The rally in precious metals appeared to have some juice left in the tank early this week. The gaps from Monday’s open have yet to be closed, and gold is now challenging $4,500 per ounce for the second time. The developments in Venezuela caught markets off guard, but the safe-haven flows are by no means contained to gold. Silver is once again outpacing its golden counterpart, pumping over 10% already since Monday, comfortably closing yesterday’s session north of $80 an ounce. Supply and demand dynamics are playing at least some part in the rise in metals, as platinum and palladium are matching the gains in silver move for move, while copper futures hit an all-time high yesterday of $6 per pound. Increased industrial demand, coupled with the potential for tariffs and export restrictions alike, may continue to put pressure on metals for a while longer. In the immediate term, volatility remains high and the next direction of travel is as mysterious as ever. An interesting start to the year. In stark contrast, oil markets are facing no shortages whatsoever. Crude prices have largely shrugged off the weekend’s events in Venezuela and the Brent Crude index is already back down to $60 per barrel. Adding to oversupply fears, President Trump has announced that “Venezuela will be turning over between 30 and 50 million” barrels of oil to the United States. Not that anyone is in any great need of it – the West Texas Intermediate is also facing near-record lows of $56 per barrel. All fun and games for traders in Chevron (CVX) however, which pumped 5% on Monday, only to retrace the entire move the following day. Markets will be granted a glimpse into the health of the US economy later today, thanks to the December ADP employment change and ISM services PMI. US stock markets are still in a jovial mood, with the Dow Jones hitting back-to-back record highs over the past couple of days and closing above 49,000 points for the first time yesterday. The S&P 500 also notched a fresh record on Tuesday, while the Nasdaq remains a little off the boil. Memory giants Sanisk (SNDK) and Micron (MU) were the outliers, gaining 28% and 10% respectively. #Metals #Oil #StockMarket
I’m often slightly baffled when writing educational forex articles as to why so many traders struggle to make consistent money in the forex markets. The irony is that most of them actually know quite a lot. The problem isn’t what they know, it’s what they don’t know that really matters. After spending 14 years working in trading, extracting money from the markets has become second nature for me. Not because of some magical indicator or secret strategy I possess, but because I understood how the real money actually trades. And that’s where most retail traders go wrong especially the newbies when they first try their hand at trading. Here’s a statistic that should make you sit up and listen: Let that sink in. If you don’t understand how that 5% trades, then you’re not really trading, you’re guessing. Educated guessing, perhaps, but guessing all the same. Now, let me clear up one of the biggest myths about institutional traders. They do not sit there all day hammering the buy and sell buttons, scalping ten pips at a time to hit their daily targets. In reality, most of their activity is simply executing orders for clients, something commonly referred to as clearing the flow. They may process thousands of trades a day, but almost none of those are for their own book. When it comes to proprietary trading, the trades that actually matter, bank traders typically place two or three trades a week. That’s it. These are the trades they’re judged on at year-end. These are the trades that determine bonuses. And as you can imagine, they’re not taken lightly. Bankers like to brag about their bonuses, size does matter! So no, bank traders are not glued to five-minute charts, desperately scalping to “make their number.” They are methodical, patient, and highly selective. Trades are only placed when technical and fundamental conditions line up. That’s the part retail traders need to understand. I’m often genuinely dumbfounded when new clients show me their charts. They’re usually littered with indicators, oscillators on top of oscillators, many of which lag price by three or four hours and frequently contradict each other. Trading like this is one of the fastest ways I know to demolish a trading account. Bank traders’ charts look nothing like this. In fact, they’re almost boring by comparison. All they want to know is: That’s it. Indicators were designed to try and predict the market. Bank traders don’t need to predict it, they are the market. If you understand how they operate, indicators become largely redundant. Their technical analysis boils down to one thing: support and resistance. Clean charts. No clutter. No distractions. Just the levels that actually matter. Now, before anyone gets excited, I’m not going to go into precise entry techniques here, because they’re almost never where people think they are. Trendlines are simply reference points. Execution is a completely different conversation. Where bank traders really earn the bulk of their money is through fundamentals. The fundamental backdrop of any currency is shaped by three major forces: And this is why currency direction can sometimes look messy. When political noise contradicts central bank messaging, markets become choppy and directionless. But when political conditions are stable, central bank policy is clear, and economic data supports that policy, that’s when big, clean trends emerge. That’s what bank traders wait for. Mastering fundamentals is not easy. It’s complex, nuanced, and takes years to truly understand. But if you do understand it, you’re positioning yourself on the right side of long-term currency direction, which is where real money is made. There is a huge amount of money to be made trading economic releases, but only if you do it properly. Two things are essential: If you hesitate, the opportunity is gone. These are the same economic releases that central banks base policy decisions on. By following and trading them correctly, you’re not only staying aligned with monetary policy, but you’re also growing your capital at the same time. This is professional trading. Not gambling. To trade successfully over the long term, you need a comprehensive capital management system. This isn’t optional, it’s your entire business plan. A proper system should: When this is in place, your only job while trading is identifying high-quality opportunities. The stress disappears. You’re no longer glued to screens, panicking over every tick. And here’s a reality check: most bank traders spend large parts of the day chatting on the desk, speaking with other traders, or heading out to lunch with brokers. They are not staring at charts all day. Neither should you be if you are trading smarter. From there, it’s simply about understanding which strategies to apply, and when to apply them. Plenty of traders talk about “beating the bankers.” I’ve even seen entire books written on it. But that misses the point entirely. You don’t want to beat them. You want to join them. Trade with the market, not against it. There are no miracle secrets in forex trading. No magic indicators. No robots that can truly adapt to a dynamic, global market. The future maybe going that way, but we are not there yet. Success comes from understanding how the major players analyse, trade, and manage risk. Get those foundations right, and you’re already miles ahead of most retail traders. At its core, making money in the markets is no different from any other business. Walmart and JP Morgan operate on the same principle; they just sell different products. Buy at wholesale prices. Sell at retail prices. Forex is not so different.
Happy New Year. Markets are currently reacting to the events that unfolded in Venezuela over the weekend. Precious metals all opened with sizeable gaps to the upside this morning and pushed higher still as safe-haven flows pushed prices higher. Gold quickly reclaimed $4,400 per ounce after the opening bell, while silver managed to briefly claw its way back over $76 after closing below $73 last Friday. Platinum and palladium are once again extremely volatile at the start of the week, with wicks in both directions. Interestingly, copper is also up strongly this morning, touching $5.80 per pound and rapidly approaching a new record high. While the latest developments in Venezuela appear to be relatively contained for the time being, many investors will take any excuse they can get to pile on precious metals. While US futures are largely unchanged, a number of Asian stock exchanges also gapped up this morning. The Japanese Nikkei 225 opened for trading for the first time this year, after being closed last Friday, and wasted no time climbing higher thanks to gains in tech stocks, in line with the surge in chip stocks in the US last week. The broader Topix index rose straight to record highs as soon as the stock market opened for the day, as did the Korean Kospi index. Chip stocks are fully back in focus, with Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung undergoing huge spikes this morning, matching the surge in ASML Holding (ASML) last Friday. Conversations are once again turning to chip shortages, to the benefit of the companies vying to meet the incessant demand. Cryptocurrencies are finally showing some signs of life, with Bitcoin electing to push back over $92,500 early this morning. Despite reaching a record high in 2025, Bitcoin’s performance last year was disappointing to say the least, culminating in a 6% loss overall. In a year where every major stock index hit record highs, to say nothing of the staggering rallies in precious metals, cryptocurrencies severely underperformed in comparison. The crypto industry impatiently awaits the Clarity Act, no doubt delayed by last year’s government closure, but the bill remains alive and well, if various insiders are to be believed. Crypto will need a new narrative to leverage at some point; progress on the regulation front might just be the ticket. Difficult to speak of Venezuela without mentioning oil markets, but as mentioned above, the weekend’s events appear to be contained for now. Despite Venezuela’s position as an oil producing nation and as a founding member of OPEC, there has been very little reaction in crude markets so far. The South American nation sits on the largest, proven reserves of oil in the world, but its production output has fallen short of the big players for decades already, in large part due to poor management, dated infrastructure and a lack of investment. Taking Venezuela out of the picture is unlikely to shift supply/demand dynamics in a major way, as reflected in the lack of reaction in the Brent Crude index. This week, for the first time in months, traders will be treated to a full schedule of US labour data. Wednesday presents the latest ADP employment change and JOLT survey, followed on Thursday by the usual jobless claims, but the big event of the week is of course the December NFP report, this time published on the first Friday of the month as intended. Predictions are currently standing at 57k new jobs and an unemployment rate of 4.5%. For many, the report will mark a return to business as usual. #Metals #NFP #Oil
The foreign exchange market is the largest and most liquid financial market in the world, with around $7.5 trillion traded every day, attracting everyone from central banks and multinational companies to hedge funds and individual retail traders. One of the first things you discover when you start learning forex is that you never trade a currency on its own. Instead, you trade it against another currency. A currency pair is simply the value of one currency compared with another, and every trade you place in the forex market is based on that relationship. It sounds straightforward enough, but I've found that this is where many beginners get stuck. They can recognise a chart showing EUR/USD or GBP/JPY, yet they aren't entirely sure what those letters actually represent or why the price moves up one day and down the next. If you don't understand currency pairs, you don't really understand how the forex market works. Once the concept clicks, everything else starts to make more sense. Reading price quotes becomes easier, economic news suddenly has context, and you begin to understand why traders choose certain pairs over others. Whether you're placing your very first trade or simply filling in a few gaps in your knowledge, getting comfortable with currency pairs is one of the best investments you can make as a trader. A currency pair is a quotation showing the value of one currency relative to another: the first is the base currency, the second is the quote currency, and the price tells you how much of the quote currency buys one unit of the base. Pairs fall into three groups — majors, minors and exotics — and majors such as EUR/USD offer the highest liquidity and lowest trading costs. Ready to trade your first currency pair? A currency pair is a quotation that shows the value of one currency relative to another. Every forex trade involves buying one currency while simultaneously selling another, so currencies are always traded in pairs rather than individually. Every currency pair has two parts: Think of it like comparing the prices of two products in a shop. You're not looking at the value of one item in isolation; you're comparing it against something else. Forex works in exactly the same way. For example, if EUR/USD = 1.15, it means €1 is worth US$1.15. In other words, you would need 1.15 US dollars to buy one euro. Once you understand that simple rule, reading forex prices becomes much less intimidating. One thing I always tell new traders is that a currency pair never moves in isolation. A rising or falling price simply tells you how one currency is performing relative to the other. Using EUR/USD as an example: This is one of those concepts that feels confusing for about five minutes. Then it suddenly clicks, and you'll wonder why it seemed complicated in the first place. Every currency pair shares a few important characteristics: Once you understand how a currency pair is quoted and what its price represents, the rest of forex starts to become much easier to follow. It's the foundation that everything else is built on. Read more: Long vs Short Position Compared: How to Trade Each Like a Pro Currency pairs are normally divided into three categories based on how frequently they're traded, how much liquidity they attract and the types of currencies they contain. Understanding the differences matters because each group offers a different balance of trading costs, volatility and risk. As your experience grows, you'll probably trade all three at some point, but they certainly aren't created equal. The three main types are: Let's look at each one in more detail. Major currency pairs are the most actively traded currencies in the forex market. What defines a major pair is simple: the US dollar (USD) always appears on one side of the trade, paired with the currency of another major economy. Because these pairs attract the highest trading volume, they generally offer the greatest liquidity, the tightest spreads and the fastest trade execution. There are good reasons why the majors dominate the market. Millions of transactions take place every day between governments, multinational companies, investment banks and retail traders. That constant flow of buying and selling means there's usually someone willing to take the other side of your trade, resulting in smoother price movement and lower trading costs. Another advantage is transparency. Major currency pairs are driven largely by well-publicised economic releases, central bank decisions and geopolitical developments. Whether it's an interest rate announcement from the Federal Reserve, inflation figures from the Eurozone or employment data from the United States, there's rarely a shortage of information to help explain why prices are moving. The forex market recognises seven major currency pairs: You may also notice that AUD, CAD and NZD are often referred to as commodity currencies. That's because the economies of Australia, Canada and New Zealand rely heavily on exporting commodities such as iron ore, crude oil, natural gas and dairy products. As commodity prices rise or fall, these currencies often react alongside them. After years of trading, if someone asked me where to begin tomorrow, my answer wouldn't have changed much. I'd still suggest starting with one or two of the major pairs. They're cheaper to trade, there's an endless supply of news and analysis to learn from, and their behaviour is generally easier to understand than thinner, more volatile markets. That doesn't mean they're easy, forex never is, but they usually offer fewer unpleasant surprises than some of the more exotic alternatives. These nicknames are widely used by traders, analysts and financial media. Don't be surprised if you hear someone say they're "buying Cable" or "watching the Aussie", they're simply referring to the currency pair rather than using its full symbol. Minor currency pairs, often called cross currency pairs, are forex pairs that do not include the US dollar. Instead, they combine two major currencies, allowing traders to focus on the relationship between those economies without the influence of the world's reserve currency. There's one small point that often catches beginners out. You'll sometimes hear the terms "crosses" and "minors" used interchangeably. Strictly speaking, every pair without the US dollar is a cross, while the term minor pairs generally refers to the most actively traded crosses. In practice, though, most traders use both terms to describe the same group. Some of the best-known minor pairs include: These pairs tend to offer good liquidity, although not quite at the same level as the majors. As a result, you'll usually see spreads that are slightly wider and price movements that can be a little less predictable during quieter trading sessions. Unlike major pairs, where the US dollar is involved in every trade, minor pairs are influenced by two separate regional economies. If you're trading EUR/GBP, for example, you'll want to pay attention to economic releases from both the Eurozone and the United Kingdom. Likewise, GBP/JPY can react sharply to news from either the UK or Japan, making it one of the more volatile crosses in the market. One pair that's earned quite a reputation over the years is GBP/JPY. Traders often nickname it "the Dragon" because of its large daily price swings. Those bigger moves can create plenty of trading opportunities, but they also demand disciplined risk management. This pair is one of my favourite pairs to trade. Minor pairs become particularly useful when you want to trade a regional theme rather than simply taking a view on the US dollar. For example, if you believe the UK economy is likely to outperform the Eurozone, EUR/GBP allows you to trade that idea directly. You're comparing Europe against Britain, without US economic data muddying the picture. It's a slightly more focused approach, and once you become comfortable following multiple economies, minor pairs can open up opportunities that major pairs simply don't offer. Personally, I think minor pairs are worth exploring once you've built some confidence with the majors. They introduce a few more moving parts, but they also teach you to think beyond the US dollar, which is an important step as you develop as a trader. An exotic currency pair combines a major currency with the currency of an emerging market or a smaller economy. These pairs are the least traded in the forex market and are typically characterised by lower liquidity, wider spreads, higher volatility and greater sensitivity to political and economic events. Because fewer traders and institutions actively buy and sell these currencies, prices can move much more aggressively than you're probably used to seeing on the major pairs. That can create opportunities, but it also introduces a level of risk that many beginners underestimate. Some commonly traded exotic pairs include: Although these pairs are available through many brokers, they don't attract anywhere near the same trading volume as EUR/USD or USD/JPY. The main reason comes down to liquidity. When fewer market participants are trading a currency pair, it becomes harder to match buyers with sellers. That often means orders take longer to fill, prices can jump between levels, and the difference between the bid and ask price (the spread) becomes much wider. Political uncertainty can also have a much greater impact. Elections, changes in monetary policy, inflation shocks or geopolitical events can cause exotic currencies to move sharply within a short period. In some cases, prices can gap significantly, particularly after major news announcements or over weekends. I've seen plenty of newer traders become attracted to exotic pairs because of the huge price swings. On paper, those movements look exciting. In reality, wider spreads and sudden gaps can quickly turn what looked like a good trade into an expensive lesson. If you decide to trade exotics, I'd always suggest reducing your position size and treating risk management as your first priority rather than an afterthought. I don't trade exotic pairs myself. Now that we've looked at all three categories, it's much easier to see why traders choose different pairs depending on their experience and objectives. The progression is fairly logical. As liquidity decreases, trading costs generally increase, and price movements become less predictable. That's one of the reasons most traders spend the majority of their time focusing on major pairs, only branching out into minors or exotics once they've gained more experience and developed a consistent trading approach. A currency pair rises when the base currency strengthens against the quote currency, and it falls when the base currency weakens. Every movement you see on a forex chart reflects the changing relationship between two economies, not the value of one currency in isolation. Take EUR/USD as an example. If traders become more confident in the Eurozone economy while sentiment towards the US dollar weakens, EUR/USD is likely to move higher. If the opposite happens, the pair will usually fall. This is also where you'll hear traders talk about being bullish or bearish: Once you start thinking in terms of relative strength rather than absolute value, price movements become much easier to understand. No single factor controls the forex market. Instead, prices react to thousands of buying and selling decisions every second. However, most movements can usually be traced back to three major drivers. Interest rates are one of the biggest influences on currency values. When a country's central bank raises interest rates, its currency often becomes more attractive because investors can potentially earn a better return on deposits and investments denominated in that currency. That's why traders pay such close attention to decisions from central banks like the Bank of England, the Federal Reserve and the European Central Bank. Even hints about future rate changes can move the market before an official announcement is made. In my experience, some of the biggest trends begin long before a rate decision itself. The market spends weeks, or even months, trying to anticipate what central banks are likely to do next. Economic reports provide regular snapshots of a country's financial health. Some of the biggest market-moving releases include: Strong economic data often supports a country's currency, while disappointing figures can weaken it. Of course, markets don't always react in the obvious way. Sometimes the numbers are already priced in, which is why experienced traders focus as much on expectations as they do on the headlines. Read more: Understanding Forex Fundamental Analysis Not every price move is driven by economic data. Sometimes it's simply about confidence, or the lack of it. When investors feel optimistic, they're generally more willing to buy higher-risk assets and currencies. During periods of uncertainty, however, money often flows into traditional safe-haven currencies such as the US dollar (USD) and the Swiss franc (CHF). You'll often see this during geopolitical tensions, financial crises or unexpected global events. Even if a country's own economy hasn't changed overnight, shifts in market sentiment can still have a significant impact on its currency. Read more: What Is Market Sentiment? Definition, Indicators and Strategies As you begin trading, you'll notice that every currency pair has two prices rather than one. The tighter the spread, the lower your trading costs. That's one of the reasons major currency pairs are so popular, particularly with day traders and scalpers who may place multiple trades throughout the day. Read more: Bid and ask price explained: What it is and how it works in trading You may also come across the terms direct quote and indirect quote. They're simply different ways of expressing an exchange rate depending on which currency is used as the base currency. It's the same relationship viewed from a different perspective, so there's no need to overcomplicate it when you're first learning forex. One thing that took me a while to fully appreciate was how much trading activity changes throughout the day. For example, EUR/USD is usually at its busiest during the London–New York overlap, when European and American markets are both open. Liquidity is at its highest, spreads are often at their tightest and trade execution tends to be much smoother. If you're learning to trade, simply focusing on those active market hours can make the experience far less frustrating than trying to trade during quieter sessions with thinner liquidity. The important lesson is that currency pairs don't move randomly. They respond to interest rates, economic data and shifts in investor sentiment, all while being influenced by the time of day and the amount of liquidity flowing through the market. Understanding those drivers helps you make sense of the price action rather than simply reacting to it. Read more: Best time to trade forex: When to enter the market during the day A relatively small number of currency pairs account for most of the activity in the global forex market. According to the Bank for International Settlements (BIS) 2022 Triennial Central Bank Survey, the US dollar appears on one side of the vast majority of all foreign exchange transactions, while the major currency pairs dominate global trading volume. That's a reflection of market liquidity rather than a recommendation of what you should trade. Beginners and professionals alike choose different pairs depending on their strategy and objectives. One thing you'll probably notice is that the top of the table is dominated by major currency pairs. That's no coincidence. High trading volume creates better liquidity, tighter spreads and smoother trade execution, which is exactly why majors remain the preferred choice for most traders worldwide. There's no universal "best" currency pair. The right choice depends on your experience, trading style, appetite for risk and even the hours you're available to trade. What suits a full-time day trader won't necessarily suit someone checking the markets for an hour after work. Here's how I'd generally approach it. If you're just starting out, I'd stick to the major currency pairs, particularly EUR/USD and USD/JPY. There are several reasons why they've remained beginner favourites for years: When I first started trading, I made the mistake of watching far too many charts. Looking back, I'd tell any beginner to pick one or two major pairs and learn how they behave before expanding your watchlist. Once you understand their rhythm, adding more markets becomes much easier. Some traders actively look for volatility because larger price swings can create more trading opportunities. Pairs such as GBP/JPY often produce substantial intraday movement, while some exotic pairs can experience even larger swings during periods of economic or political uncertainty. The trade-off is that bigger opportunities come with bigger risks. One lesson every trader learns eventually is that volatility cuts both ways. The larger the daily range, the smaller your position size should generally be. Chasing excitement is rarely a trading strategy. Your available trading hours should also influence which currency pairs you follow. Trading a currency pair during its busiest session usually means: Trying to trade a pair when its home market is largely asleep often produces the opposite effect. Every trader pays the spread, whether they realise it or not. That's why traders who place lots of trades, particularly scalpers and active day traders, usually gravitate towards major currency pairs, especially EUR/USD. Its exceptional liquidity means brokers can often offer the tightest spreads available. It might only seem like a tiny saving on each trade, but costs add up surprisingly quickly. If you're entering dozens of positions every week, even a slightly wider spread can make a noticeable difference to your overall results. The best currency pair isn't necessarily the one that moves the most. It's the one that matches your experience, your trading plan and the amount of risk you're genuinely comfortable taking. That's a far more sustainable way to approach the market than simply chasing whichever chart happens to be moving the fastest. A currency pair in forex is a quotation showing the value of one currency relative to another, how much of the quote currency it takes to buy one unit of the base currency. Every forex trade involves buying one currency while simultaneously selling the other. The seven major currency pairs are EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD and NZD/USD. Each includes the US dollar and together they account for the majority of global forex trading activity. Buying a currency pair means you're buying the base currency while selling the quote currency. You're expecting the base currency to strengthen relative to the quote currency, causing the pair's price to rise. Major currency pairs, particularly EUR/USD, USD/JPY and GBP/USD, are generally the best starting point for beginners. They offer high liquidity, tight spreads and plenty of educational resources, making them easier to understand than thinner, more volatile markets. EUR/USD is usually the cheapest currency pair to trade because it typically has the tightest spreads in the forex market. USD/JPY is also known for relatively low trading costs, while major pairs are generally cheaper to trade than minor or exotic pairs. Most beginners are better off focusing on one or two currency pairs rather than trying to monitor the entire market. As your experience grows and you develop a consistent trading strategy, you can gradually expand your watchlist. Generally, yes. Exotic pairs tend to have wider spreads, lower liquidity and greater price volatility, making them more challenging to trade. Most new traders will find it easier to build confidence by starting with the major currency pairs. Not exactly. Exchanging money is usually a one-off transaction for travel or business, whereas trading a currency pair involves speculating on whether one currency will strengthen or weaken relative to another in an attempt to make a profit. A currency pair is the foundation of every forex trade. Rather than buying or selling a single currency, you're always comparing the value of one currency against another. Understanding the relationship between the base currency and the quote currency is the first step towards reading charts, interpreting market movements and making informed trading decisions. It's equally important to understand that not all currency pairs behave the same way. Major pairs offer the highest liquidity, the tightest spreads and are generally the most suitable place for beginners to start. Minor (cross) pairs provide opportunities to trade the relationship between major economies without involving the US dollar, while exotic pairs can deliver larger price swings but usually come with higher costs and greater risk. After years of trading, one thing has become clear to me: there isn't a single "best" currency pair. The right choice depends on your experience, your trading strategy, your tolerance for risk and even the hours you're available to watch the market. Finding the pair that suits your style is far more important than simply choosing the one that's making the biggest headlines. Once you've got a solid understanding of currency pairs, the next logical step is learning the building blocks that sit alongside them, concepts such as spreads, pips and market liquidity. Together, they form the core language of forex trading and will make everything else you learn much easier to understand. Lee W. is a seasoned professional trader with over 10 years of experience. Passionate about sharing valuable expertise and unique market insights, Lee W. now serves as an external and independent market analyst for RADEX MARKETS. Reviewed by RADEX MARKETS Risk Warning: Trading derivatives and leveraged products carries a high level of risk, including the risk of losing substantially more than your initial investment. Related concepts:
