As a writer who knows much about Forex trading, I have received several questions about Forex trading hours and the best time to trade Forex in Nigeria.
In addition, I have also been asked about the best currency pairs to trade and when to trade them. When you talk about Forex trading, currency pairs are many and people are often confused about the best currency pairs to trade; especially if you don’t know anything about Forex trading strategy.
Forex trading times are different in every country, and that is why the foreign exchange market is considered the biggest markets around the world.
It is functional 24 hours a day and seven days a week. Before entering the field of Forex trading and able to call yourself a trader, it is important that you learn all you should know about currency pairs. In this post, we will discuss the areas of currencies and pairs as well as the major pairs and correlations.
Trading currency pairs are extremely popular in the foreign exchange market. Foreign currency trading consists of the simultaneous buying of one currency and selling of another. A currency pair can be seen as an instrument that is bought or sold.
When you purchase a currency pair, it means you are buying the “base” currency and selling the “quote” currency. The “base” currency represents the very first currency stated in a currency pair while the “quote” currency represents the second currency. On the other hand, once you sell the currency pair, it means you’re selling the “base” currency and receiving the “quote” currency.
Every currency pair comes with an exchange rate which has a “bid” and “ask” price. The “bid” prices are the interest rate, how the broker will pay for the currency pair while the “ask” prices are the interest rate that this broker will sell the currency pair.
It’s critical that all traders learn which currency pairs are traded often. Actively traded Forex currencies are called the “majors” in Nigeria. And for you to determine the best Forex major pairs, you need to understand that the Forex trading sessions change as well.
These below are the most often traded majors around the world. They include:
- Euro (EUR)
- US Dollar (USD)
- Japanese Yen (JPY)
- Great British Pound (GBP)
- Australian Dollar (AUD)
- Swiss Franc (CHF)
Every currency has its unique symbol and nickname. These symbols and nicknames help traders know exactly which currency they are trading in terms of bid/ask quote. Listed below is a table to display the symbol, country and nickname for some currencies:
- Currency Symbol Nickname Country
- Australian Dollar AUD Aussie Australia
- Canadian Dollar CAD Loonie Canada
- Swiss Franc CHF Swissy Switzerland
- Euro EUR Euro Eurozone
- Great British Pound GBP Cable Great Britain
- Japanese Yen JPY Yen Japan
- New Zealand Dollar NZD Kiwi New Zealand
- US Dollar USD Buck United States
Major Forex pairs refer to major currencies that are associated with the USD. For example, if the Great British Pound is paired with the USD, the quote automatically gets to be a major pair.
This therefore clarifies that this US Dollar is definitely the most stable, reliable and for that reason popular currency around the world.
For many years, the USD has been the most popular currency to trade and many other currencies are paired with the dollar due to this reason.
One of the most popular pairs to trade in the Forex market is the US Dollar and the Euro. It’s the most liquid currency pair also it offers minimal bid-ask spreads.
This pair is also volatile, which is seen as an additional advantage for many traders because it gives them an opportunity to capitalize and make money from any sudden changes.
One additional best currency pairs to trade in the Forex market is the US Dollar and Japanese Yen. The relations between the US and Far East make this pair quite profitable because of the slight volatility. The Dollar/Yen currency major is considerably versatile, making it one of the best currency majors to rely on.
There are lots of major pairs which can be correlated with their price movement. This means they move almost identical to one another. For instance, the EUR/USD carries a negative correlation with USD/CHF along with a positive correlation with the GBP/USD.
To sum it up, the best currency pairs to trade at night should be: USDEUR, USDGBP, USDJPY, USDCHF, EURGBP, USDAUD, USDCAD and a few more. Almost 90% of the global currency trading is in these pairs.
It’s always great to know about currency pairs to trade in Nigeria. Knowing the Forex opening hours and the best Forex currency pairs to trade can help you use a strong lead in your foreign currency trading experience.