Podcast:

Which FX Pairs Should You Trade?

In this weekly video:

00:25 – Which currency pairs should I look at?

00:47 - It doesn’t matter where you live and what you trade

01:11 – Don’t just focus on the Major pairs

02:00 – Stick to the main 8 currencies

02:50 – What is the best technical setup – find that and trade it

03:48 – I also focus on strength and weakness

04:10 – What has the path of least resistance?

05:50 – Use Profiles to make life easy

How do you decide what currency pairs to trade as a Forex trader? Let’s get into that and more right now.

Hi, Forex traders, Andrew Mitchem here, the owner of The Forex Trading Coach. This is video and podcast number 235.

Which currency pairs should I look at?

Now I get a lot of questions saying, “Hey, Andrew, can you tell me which currency pairs I should be trading? Which should I be focusing on?” Because it’s quite difficult for people to know which currencies to look at, there is so many obviously there to look at. And it’s a thing that confuses so many people. So let me give to you some tips and some helpful information of how I go through this process.

It doesn’t matter where you live and what you trade

First of all, it doesn’t matter where you live. A lot of people say they live in the UK, and they say, “I want to only trade the British pound pairs.” A lot of people live in Canada only want to trade the Canadian pairs. It doesn’t matter. Just because I live in New Zealand doesn’t mean to say I just trade New Zealand dollar pairs. It really does not matter.

Don’t just focus on the Major pairs

The other thing to be careful of is, a lot of people also say, “Just focus on the major pairs.” Like the euro US, the pound US, US Swiss franc, Aussie US, US yen, etc., US Canadian.” The problem is you’ll notice they all contain the US, so therefore what you are trading is very heavily dependent on the direction and the strength or weakness of the US dollar at that time.

So if you are generally trading the major pairs only, then half of what you are trading is focused on what the US dollar is doing. So that means you are either going to be completely right or completely wrong on the vast majority of those trades that you take if they are all correlated. So for me it’s like definitely look at some of those minor pairs and the exotic pairs, but only to a degree.

Stick to the main 8 currencies

I personally don’t go trading Norwegian kroners and South African rand and all that. I just stick to the majors which are the US dollar, the euro, the pound, Swiss franc, British pound, the Aussie, Kiwi and the Canadian. I might have missed one, but the main eight. And so stick to those and the combinations of each other.

So as an example. I’ve taken a trade today on the New Zealand Canadian dollar. It’s fine because it’s taking two of the main currencies, and it could be like the Australian dollar against the yen, it could be something like the Canadian Swiss franc, it could be a combination of those. So personally I’d stick to those main eight currencies and combination of each of them. So it doesn’t matter where you live in the world or what your local currency is or what your account is denominated in, none of that really matters.

What is the best technical setup – find that and trade it

To me as a technical trader it’s all about what is showing the best setup right at the time that I’m taking the trade. Now I only have a look at a chart upon the completion of a candle. So if I’m looking at a daily chart, it’s only once a day. If it’s a four-hour chart, it’s once every four hours.

And actually you probably know I’ve got some great software that I have for myself and my clients to tra...