Choosing currency pairs to trade in Forex trading is important. In order to maximize your chances of success in the Forex market, you need to choose one or a small number of pairs of currencies to trade and then after doing this, you should stick to them. This way, you will be able to master them and maximize your profits in the currency market.
Every currency moves in a slightly different way and different currencies tend to have different habits and such. This is why you need to focus on just a few, so that you can master them and make more money.
There’s no point in moving from one currency pair to another, because by doing this you will never be able to get a chance to really master one pair in particular. By focusing on particular currency pair, you will be able to master that particular one over time; you will begin to become more familiar with its trends, patterns and habits that separates it from other pairs.
Once you master a particular currency pair, you will really be able to start making some real money and your trading of currencies will become more effortless.
It’s best to focus on major currency pairs as they are generally easier to trade successfully. They are less volatile than exotic ones for example, which makes it easier to make profits with them. Major pairs of currencies are also easier to analyse. For example with a major currency pair like USD/GBP, you would be able to look at the nonfarm payroll in the US and stay up-to-date with both economic and political releases and announcements in the UK. However with exotic pairs of currencies, you would struggle to find good fundamentals to predict their futures.
There are other reasons why exotic currency pairs are more difficult to trade successfully too, so you should first try to master the major pairs of currencies first before experimenting with minor and exotic ones. Some professional Forex traders who have been trading for years still trade the same pairs of currencies they started out with in the beginning of their currency trading careers. There’s really no reason or need to move onto different pairs of currencies, especially when you are actually making money. Of course it’s good to diversify your investment portfolio in Forex trading, but it’s good to know the currency pairs you trade inside out.
In conclusion, ideally you should put all of your focus on a smaller number of pairs of currencies so that you can master them. This will allow you to become more familiar with the specific trends, patterns and habits associated with the currency pair(s) that you have decided to trade. This will in turn allow you to deduce more profits. There’s no reason or need to jump from one pair of currencies to another before you have had the chance to master the first one. First of all, you should develop a good Forex trading system and outline which currency pair(s) you will focus on and work on mastering, within it.