At this point, you might already have the idea that foreign exchange rates are being cited in pairs. In addition, the currencies that are being referenced by these pairs are one of the important things you should comprehend as a Forex trader. Whether you are planning to take your first step on your first trade or being an experienced trader understand these major Forex currency pairs will serve you well in your journey as a trader.
Let’s dive deeper to understand the major Forex currency pairs...
Key Concept: The Major Forex Currency Pairs
If you are trading Forex, even as a beginner, you will, sooner or later, come across this term called “The Majors.” Basically, the Majors are the World’s most heavily traded currencies and they are EUR (Euro), USD (US Dollar), JPY (Japanese Yen), GBP (Great British Pound), AUD (Australian Dollar), and lastly CHF (Swiss Franc).
Each of these Major Currency has a symbol which is very much alike to stocks except that these are Forex currencies. At the same time, just like some stocks (IBM for Big Blue as an example), these heavily traded currencies have nicknames as well. While it is really not quite important that you know the nicknames, it come in good reference because experience traders often use these nicknames when talking about these major currencies.
Below are the nicknames for each currencies…
Australian Dollar (AUD) = Aussie (what’s up mate!)
Canadian Dollar (CAD) = Loonie (Not the same a Lonnie Tunes)
Swiss Franc (CHF) = Swissy (Certainly not sissy at all)
Euro (EUR) = Euro (that’s not really a nickname lol)
Great Britain Pounds (GBP) = Cable (has an interesting history why it’s called Cable)
Japanese Yen (JPY) = Yen (no nickname here too)
New Zealand Dollar (NZD) = Kiwi (like the fruit)
American Dollar (USD) = Buck (we all know it’s green in color)
So what are the Major Forex Currency Pairs?
You get a Major Forex Currency Pair when you pair any of these majors against the USD (yep, that’s the big brother…you probably know anyways). So when you pair a major currency, for example GBP, against USD, you get a major Forex currency pair in GBPUSD. Since there are 8 major currencies, when you pair all of them up against the USD, you naturally get 7 Major Forex Currency Pairs and each of them has their own combo nicknames now.
AUDUSD = Aussie Dollar
USDCAD = Dollar Lonnie
USDCHF = Dollar Swissy
EURUSD = Euro Dollar
GBPUSD = Pound Dollar
USDJPY = Dollar Yen
NZDUSD = Kiwi Dollar
These are the most traded and most liquid pairs available. For us, we trade only these Major Forex pairs because the liquidity of these pairs created very tight spread which is good for us as traders. Our recommendation if you want to be in the trading business in the long haul is to trade only these 7 Forex pairs. In fact, we usually trade only EURUSD and GBPUSD. We might dabble with the other but our focus is EURUSD and GBPUSD. We just love the tight spreads as it allows just to get in and out fast without losing out to wide market bid/ask. We suggest you do the same…
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