One of the common questions most traders ask after they have chosen a Forex Broker is which currency pair they should be choosing. Even if not, this would be a question that you are going to face as a Forex trader and your decision on a currency pair could be the difference between making profits to incurring losses.
As you gain more experience as a Forex trader, you are going to notice that there are a lot of different factors that should be considered when placing one or more Forex trades either online or through a trading platform. Hopefully, this guide will help you determine and consider these factors.
The most important thing to remember when picking a currency pair is that you should always keep your options open and not stay within the confines of a few currency pairs all the time.
As you can pair up almost any currency in the world, it would be considered best if you were to select some of the lesser-known currencies to your trades as well as they tend to be often more volatile than most of the world’s major currencies and the additional trades can help strengthen your trading portfolio.
Currency Pairs: Frequently Asked Questions
The following section of this guide will delve into the frequently asked questions regarding currency pairs. Hopefully, this will give you some insights and help you determine which currency pairs to choose when trading in the Forex market.
- Should I only trade with my home currency?
While most traders do stick to their home currency in their trades, it would be much more beneficial to widen your horizons, choosing other currencies apart from the major currencies as the more currency pairs you invest in, the more chances of locking in on a profitable trade.
- Can I trade Bitcoin with other Currencies?
There are a lot of Forex brokers that make it possible for you to trade various cryptocurrencies, like Bitcoin, with other fiat currencies or cryptocurrencies. The types of cryptocurrencies you will be able to trade with will depend on the broker. The volatility of Bitcoin against the US Dollar would mean that many traders have started to pair these currencies together on numerous trades.
- Is it possible to trade in a No-Risk environment?
It is possible to trade in a no-risk environment as most Forex brokers do offer a demo account after signing up for their trading platform. A demo account is suitable for everyone who has never traded in Forex before.
As soon as a demo account is set up, you will be able to place a lot of risk-free trades as well as test out the trading platform’s features to ready yourself once you start trading with real funds.
- Can I trade more than the initial deposit?
When opting to sign up and open a Forex trading account, most brokers would offer bonuses for newcomers in their platform after an initial deposit has been made.
These bonuses often come in various forms with some of the most common offers allowing you to increase the value of your trading budget which would result in increasing the number of trades you will be able to carry out and in turn, increase your chances of gaining profit.
- How do I make us of an Account Manager?
Once you have opened a trading account with a Forex broker, you may be given access to your account manager. Often than not, it would be worthwhile to communicate with your account manager, especially when looking for ideas on what to trade in the Forex market.
Remaining in contact with your account manager will be extremely beneficial to your career as a trader as they can offer you a wide range of exclusive promotional offers which can help you get a lot more value from your trading budget and can also keep you updated with the positions that are being focused on by other Forex traders.