Forex currency pair system: The 29 pairs every trader should know

Forex trading involves buying one currency while selling another, which means you always trade in currency pairs such as EUR/USD (Euro against the US Dollar). Currently, there are 180 Forex currency pairs accepted worldwide, but for traders, 29 pairs are popular and widely traded. Generally, these Forex pairs are divided into three main categories.

Category 1: Major Currency Pairs (Major Currency Pairs)

Major currency pairs are the foundation of the Forex market, consisting of 8 main currencies: US Dollar (USD), Euro (EUR), Japanese Yen (JPY), British Pound (GBP), Swiss Franc (CHF), Australian Dollar (AUD), New Zealand Dollar (NZD), and Canadian Dollar (CAD).

Major currency pairs are primarily pairs involving the US Dollar and other major currencies, totaling 7 pairs. These are the most popular among traders worldwide. These pairs have the highest liquidity and frequent price movements, creating numerous trading opportunities. Therefore, starting with major currency pairs is a good choice for beginners.

Category 2: Cross Currency Pairs (Cross Currency Pairs)

Cross currency pairs are Forex pairs that do not involve the US Dollar but include other major currencies. Although their trading volume is lower than major pairs, they still offer sufficient liquidity and diverse trading opportunities. The most popular cross pairs are determined by the Euro (EUR), Japanese Yen (JPY), and British Pound (GBP).

Euro Group (EUR)

Japanese Yen Group (JPY)

British Pound Group (GBP)

Other Pairs

Category 3: Exotic Currency Pairs (Exotic Currency Pairs)

Exotic currency pairs involve trading the US Dollar (USD) against currencies from emerging market economies, such as Brazil, Mexico, Turkey, Hungary, and Singapore. These pairs tend to be highly volatile, have wider spreads (spread), and lower liquidity, making them more suitable for experienced traders.

Other Forex Pairs to Know

Beyond the 29 main Forex pairs, there are several other interesting currency groups, such as The Scandies, which include currencies of Scandinavian countries like Denmark, Norway, and Sweden. There is also CEE, representing currencies from Central and Eastern European countries such as Albania, Bulgaria, Croatia, and the Czech Republic.

Additionally, the BRIICS currency group includes the currencies of major emerging economies: Brazil, Russia, Indonesia, China, and South Africa.

With knowledge of the 29 Forex pairs and their categories, traders can select pairs that align with their trading strategies and risk levels effectively.