The best currencies to trade
If you want to trade forex, you'll find out there are a huge number of currencies that you can trade.
But when it comes to actually trading yourself, you should only concentrate on a select few.
So what are these currencies? And why should you trade them?
Read on to find out…
What currencies you should trade
With forex trading, you want to trade the currencies
that are the most liquid.
Not only does this mean you can enter and exit trades easily, but it also means the spread between the buy and sell price will be tighter than more exotic currencies.
If you decide to spread trade or use contracts for difference (CFDs) to trade currencies, you should stick to trading the major international currencies.
The US dollar (USD);
The euro (EUR);
The British pound (GBP);
The Japanese yen (JPY);
The Swiss franc (CHF);
The Canadian dollar (CAD); and
The Australian dollar (AUD).
You can trade any combination of the above major currencies and stand to make great profits.
What currencies to trade the rand against
If you decide to trade the rand against major currencies using currency futures, there are three currency pairs that you should focus on.
The US dollar and the rand (USD/ZAR);
The euro and the rand (EUR/ZAR); and
The British pound and the rand (GBP/ZAR).
You’ll likely find the spread for the Japanese yen and the rand (JPY/ZAR) is quite wide and you should avoid trading it.
You can spot the most liquid currency pairs by looking at the spreads between the buying and selling prices. The tighter the spread, the more liquid the currencies.
So there you have it. The best currencies to trade.
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