Currency pairs to start with as a beginner?

I would avoid E/U because I think it is important to understanding the underlying economic drivers that cause currencies to move. With 16 nations represented in the Euro that can be overwhelming.

EURUSD, USDJPY, USDCHF.

But of the 3 the EURUSD wins by far because of the volatility

i do agree this point of wiev actually , about the fundementals.. but besides , because of eur/usd volatility , i myself find eu technical analysis works good.. just my opinion..

I agree with a previous post about fundementally trading what you're surrounded by.

For example, I live in Canada so news about the USD/CAD is very common in the media and economic based news is prevelent and easily accessable. Because of that, I demo trade/study USD/CAD as my primary pair.

I would imagine if I did not live in CAnada, I would have little interest in that pair since I wasn't exposed to it so prevelently.

Furthermore, depending on your trading style, it usually doesn't hurt to follow another pair or two because if you're babysitting one pair you risk over trading or pulling at teeth to force a trade that is less than ideal.

I know my biggest weakness is a huge lack of patience. I'll be following along and get bored and start looking for a trade instead of waiting for the trade to find me.

Good luck.

-DRL
p.s. My first post so howdy everyone!

Sounds so familiar
I want to have patience.
AND I WANT IT IMMEDIATELY!!!!

I finally decided to go to much lower timeframes. I tried to trade higher timeframes, using multiple pairs but it was hard to follow for a beginner. I would take a trade on a daily chart and after a week or so forget why I went into it in the first place.
I ended up sticking with one pair and trading intraday (I'm sitting in front of a computer all London session long anyway). I trade M15, M5 and even M1 from time to time. I know PA isn't as clean as on longer candles but I reckon that while I am still learning and testing different approaches and strategies, it is not such a big deal - and this way I have multiple trading setups each day, all happens quickly and it's easier to see what went well and why and what went wrong and why.

Yeah, I currently papertrade from work mostly right now and when I'm home I'm staring at 5m charts mostly.

I --cannot- stand the idea of going to bed with an open position. I'm the kind of person who will have to shut it down before bed every night no matter how sound my practice or skill or method is.

I like the 5m charts because you can get good eyes on good, short trades especially after news. (I'm a news junky I'm afraid).

But yeah biggest thing I can say as a new forex student is to stick with what's going to be the most available. Sure, the internet has msot of the information you're going to need but it isn't absolutely everything. Like I mentioned before, I follow USD/CAD the most because I live in Canada. All the technical charts won't ever tell you how the mining companies in Northern Ontario are doing or if the athabasca oilsands are hiring like crazy, indicating huge sales are coming. Some of the more micro sized news that still contributes to the overall economic strength or weakness of a country isn't as easy to find unless you're in the country.

So long winded story short stick with what's the most familiar or with where the most information will be easily accessable and then become one with it.

News tends to have a heavy influence on Eur and Usd respectively, as the Eur is used by many countries (i.e. greater amount of news, and speculative factors). It might be easier to focus on a pair less prone to large amounts of / and quickly changing news. On such a pair, technical trading will more likely be successful. Low spread always helps. Focus on just one pair though. Aud/Jpy perhaps? Not sure what the spread is on that one..

Start with one and learn about the fundamentals, and memorize the overall look of the Monthly / Weekly charts. What I mean is a rough mental picture. As they move so slowly you will be able to do so.

This will allow you to pull from memory where the pair has gone high and low in the past ten years +. Plus you will get a median price for the pair, sort of a major pivot / support and resistance levels. You could also break it into quarters. See example below.

Many a great Forex Traders have said it is best to learn how to trade the Higher time frames first. Such as Weekly Daily and Hour 4. Maybe peeking at H1 to get entries. I have always agreed but, like most, when I first started trading FX I was looking for the action.

There is a common delusion amongst newbies that this will be easy as pie, Then you get your first free 50,000 USD demo account! Wooo! Now we're one step closer to pulling in 1000 a day. I mean if your making 1 or 2 k a day might as well just work 3 days a week and party the rest right? WRONG.-

This delusion of quick and easy riches via retail forex is certainly pushed to the newbies by the brokers with words like FREE / 50,000 $$$. Trading "CAN BE EASY" Sure it can after years of hard work and likely several thousands of lost money on blown accounts because why?

A. You didn't take any time to research the pair or pairs you were trading
B. You were ready, those higher term charts were just too slow, you needed
the action on the M1 M5 and M15.
C. You were destined to not fall into the mold of beginning traders, you were destined for success thus you traded all your money away thinking after a few months on a demo and the dummies book for FX you were ready to show the world your scalping expertise. I mean you did double the demo account.

Anyway, then there should be a revelation or a crux somewhere that you realize everything you have learned or taught yourself is wrong. FOREX trading takes time, devotion, the will to learn and much more to be successful.

The strong will get back up and on the saddle, cash in again, learn the higher TFs, Risk / Money Management and the pair's technical levels and the fundamentals that drive them. If you can find a mentor even better.

The weak will give up.

Once you feel that you have done enough research and hours trading the selected pair then add another one. Perhaps one that is inversely correlated at the time.

Examples. Eur/Usd & Usd/Chf or GBP/ USD and U/C
if they are inversely correlated you can begin to test out some counter pair hedging. Ie: you have a 300 pip euro trade, but it may dip 100 before going to 400. You don't want to close and you don't want to miss out, you can hedge the trade by buying the USD/CHF - (Right now the market is wacky so do research first)

Also, sorry to be so lengthy - Go live after a few months of demo trading with a couple hundred into a micro account so you get the idea of what trading with real money is. Next you can work on separating your emotions from that money.

Don't hedge losing positions.
Don't buy systems from people that promise Bernie Made-off gains.

Some may agree or some may not, but there is a figure something like 90% of new FX retail accounts are blown up within 3 months at most (appx) After discussing this with some friends I'm just trying to provide some of the reasons why.

There is no right or wrong answer, it will ultimately come down to you and your comfort level. I suggest focus on the Majors first, Start with EUR/USD the most widely traded pair - then the minors AUD - NZD - /USD -- USD/CAD
Hope this helps a bit.
XTrade.

Hello

We would suggest you to start with EURUSD and then move on to GBPUSD.

It is recommended to trade with major pairs first, before to move on risky or wide spreads pairs.

Regards

^^

ditto

Eur/Usd costs less to play
I think if your learning
it's always good to be thrifty.

EURUSD is probably the best currency pair to start trading with first, due to its high liquidity and low spread. It is the most popular currency pair.

I think this here is a very good advice. I started with this pair.

No doubt, the best currency pair for beginner is EURUSD. To prove this statements a have few facts.

All brokers offers the lowest spread on EURUSD. EURUSD trades are the cheapest ones.

Intra day range 150 pips.

As a beginner you need to make a lot of trades positive, negative... a lot! Good when you pay less commission for each trade.

If you are beginner you should stick to USD/JPY. When you get to hang of trading, you can try other pairs like EUR/USD.

Had a similiar question myself. So, it would appear that USD/JPY or EUR/USD would be the way to go for the first pair.

I'd like to interject a question here, because I think it fits, but what are the 'popular' exotic pairs? Can all currencies be traded, or only a few? The exotic pairs just mean they aren't as popular and moving, right?

Exotic currency pairs involve the US dollar against a currency from a riskier emerging market. They are not very liquid, and this results in less movement and higher spreads (not vice versa).

Can they be traded? Well if a pair is provided by your bröker then it sure can be traded. Unless what you meant to say is "can they be effectively traded?", in which case I'd say it depends on whether or not you're able to spot exploitable opportunities (if/when they are available) within those pairs; and by "exploitable" I mean opportunities where the relatively high spreads etc. won't affect your profitability.

Now if exotic pairs had the same spreads as the major pairs, this would be a great opportunity simply because these pairs are less efficient, but this is not the case since you have to pay a lot more in trading costs (spreads) which somewhat cancels such exploitability. Because of such costs, exotic pairs should only be considered by the more experienced traders and hedgers. You see as a less experienced trader, you are better off spending as less as possible in trading costs while being put through as much market activity as possible so that you learn more quickly.

So the bottom line is:

 

1. If you're not an experienced trader, I would highly recommend that you make a short list of the 3-4 most liquid pairs (i.e. EURUSD, USDJPY, etc.) and pick the one that fits your local timezone the best.
2. You can start looking at some other pairs as you gain experience, just stay realistic in terms of how many you can truly focus on at once and you'll be fine.
3. Last but not least, know thy market: Don't add a currency pair to your list of traded pairs unless you're willing to familiarize yourself with the pair's underlying market(s).

the best thing a beginner can do is some critical thinking.

close your charts and start from the basics

look at the quotes and find a way to figure out how to trade from them. using modern technical tools,

Marv,

Thank you very much for this detailed explanation. I had always wondered if any currency could be traded, and hadn't thought about the "effectively traded" part. Being new, I'm not feeling too adventurous, so I'm happy going with EURUSD for now.

I'd rather stick with EU if one wishes to train in intraday trading. UJ is very slow nowadays. The ADR is lower than 50 pips on UJ while it is well over 150 on EU. This, among other thing means that if you have the same spread on both pairs the spread will eat much more of your profits on UJ.

Any. So long as you stare at the same currency for more than a month.