Becoming a Forex trader in your free time isn’t as hard as it seems. Read our simple guide to get started.
Choosing the right currency pairs can make or break a part-time forex trader’s portfolio. The options are nearly limitless but it is strongly advisable, especially for new traders, to choose only a few and get to know them really well. Each currency has its own ‘personality’, so to speak and the better a trader knows his currencies and pairs, the better they will perform. This doesn’t mean that you’ll never be able to take trades on other pairs, it simply means that you’ll specialize in only one or two, for a start.
What to consider when choosing currency pairs
It’s a good idea to choose a pair that is active when you have time to trade. Depending on the timeframe you choose to work with, active pairs will allow you to get to know forex trading faster and develop your skills as a trader. Of course, you can also choose to work with daily, weekly or monthly charts, where short-term activity won’t matter as much.
An added advantage of trading during active hours is better liquidity. The more active a market is, the better the chances of precise and quick trade executions. Markets are often more active around opening and closing time and as a trader gets to know his specialized currency pairs, he’ll soon know when volume peaks.
Sterling pairs worth a watch
GBP/USD is one of the world’s favourite currency pairs for good reason. The pair is one of the most liquid on the Forex market and an excellent choice for new traders. GBP/USD spreads are usually very narrow and multitudinous trades are regularly possible, no matter what strategy is being used.
GBP/EUR is another good choice between the GBP pairs. Although the active market hours are shorter, the pair is still very liquid and often displays spectacular trading opportunities. With Brexit being headline news most of the time, GBP/EUR enjoys a lot of attention.
Read also Part 1, Part 3 and Part 4 of the “How to become a part-time Forex Trader” guide.