The art of the trade, or bartering, has been prevalent in our lives as early as a man could communicate. You give one item in exchange for another, that is the basic law of trading. Over time people start to realize that trading can actually be a lucrative form of livelihood rather than a necessity. In fact, some well-established traders would trade something small and build on its trade per trade into something significant. More often than not, those who are great at trading has the gift of gab and can sweet-talk their way to success. And with the evolution of the forex market, the exchange of currency pairs became such a widespread phenomenon that there are some currencies that are considered better than others.
But what currency pairs should you invest in? And should you let go of other currencies that are not on the list? Is it even worth trading currencies when the market is oversaturated to the brim? All of that and more will be discussed here as we talk about the best currency pairs to trade for 2020.
What Is A Currency Pair?
Forex trading, also known as foreign exchange trading, is basically the business of buying and selling currencies in pairs. Just like with everything in life, you give some to gain some. And that phrase is true even in here.
To buy one currency you must sell another currency back. There has to be an exchange otherwise you are just buying. What you are after here is to purchase a currency at its lowest possible value then sell it at its highest. Which is easier said than done in most cases.
Commonly traded are the major currencies. In fact, they are considered to be the strongest and most dominant traded currencies. The largest of them all would be the US dollar. And the reason for that is due to the sheer size of the US economy being the largest.
Most Traded Currency Pairs
As was previously mentioned, the most traded currencies are the major ones that make up most of the market. And normally it is through their economy that gets them the high demand for their respective currencies. Thus bringing us to the highest traded currency pairs available.
-EUR/USD (Euro – US Dollar)
-USD/JPY (US Dollar – Japanese Yen)
-GBP/USD (British Pound – US Dollar)
-USD/CHF (US Dollar – Swiss Franc)
-USD/CAD (US Dollar – Canadian Dollar)
-AUD/USD (US Dollar – Australian Dollar)
Although it would seem that the only logical course of action is to start trading in USD, you shouldn’t skimp on other currencies. There is potential for all and although the USD is the most traded, it is also the most oversaturated. Always study up your currency pairs before making a decision and make sure to invest properly.