Forex Walkthrough

AAA

Introduction - Most Traded Pairs

Although some retail dealers trade exotic (less popular) currencies such as the Thai baht or the Czech koruna, the majority trade the seven most traded currency pairs in the world. The four most popular, also known as "the majors" are:

EUR/USD (euro/dollar) – "euro"
USD/JPY (U.S. dollar/Japanese yen) – "gopher"
GBP/USD (British pound/dollar) - "cable"
USD/CHF (U.S. dollar/Swiss franc) – "swissie"

The three less popular commodity pairs are:

AUD/USD (Australian dollar/U.S. dollar) – "aussie"
USD/CAD (U.S. dollar/Canadian dollar) – "loonie"
NZD/USD (New Zealand dollar/U.S. dollar) – "kiwi"

These currency pairs, along with their various combinations (such as EUR/JPY, GBP/JPY and EUR/GBP) account for more than 95% of all speculative trading in FX. Given the small number of possible trades - only 18 pairs are actively traded - the FX market is much less broad than the stock market. (For more, see Top 8 Most Tradable Currencies and Popular Forex Currencies.)

Brokers


Related Articles
  1. Forex Education

    5 Foreign Currencies Americans Buy the Most

    Look at which currencies Americans buy the most for travel abroad and remittances, and how the current strength of the dollar is impacting those transactions.
  2. Chart Advisor

    Sector Headwinds Buffeting First Solar (FSLR, TAN)

    First Solar has entered a new downtrend after failing to break out above two-year resistance.
  3. Chart Advisor

    Better Buy: Home Depot or Lowe's? (HD, LOW)

    Home Depot and Lowe’s have risen to resistance levels that could yield fresh trend advances.
  4. Term

    The Difference Between a Long and Short Position

    Stocks are owned in a long position and owed in a short position.
  5. Fundamental Analysis

    4 Challenges China Faces According to PIMCO

    Get the latest thoughts from Luke Spajic, executive vice president and portfolio manager in Singapore for PIMCO, on challenges facing China's economy.
  6. Markets

    Re-Emerging Markets?

    If you're wondering when will the emerging markets comeback be? Read on because is still young, but encouraging.
  7. Chart Advisor

    3 Short Sales in the Apple Ecosystem (AAPL, SWKS)

    Deteriorating sentiment should offer profitable short sales on the key Apple suppliers.
  8. Chart Advisor

    Amazon Levels to Watch After Earnings (AMZN)

    An Amazon rally above 650 after earnings should open the door to a test of the bull market high.
  9. Investing

    Mergers & Acquisitions Report: 2 Trends in the Market

    Learn what attracts buyers and sellers into today's M&A market, as well as what trends are emerging in 2016 by sector and location.
  10. Chart Advisor

    Nasdaq-100 Weakness Waving Red Flags (QQQ, SPY)

    The Nasdaq-100 is lagging blue chip and small cap indices, signaling a bearish divergence that could end the recovery wave.
RELATED TERMS
  1. Adjusted EBITDA

    Adjusted EBITDA is a measure computed for a company that looks ...
  2. Derivative

    A security with a price that is dependent upon or derived from ...
  3. Return on Market Value of Equity ...

    Return on market value of equity (ROME) is a comparative measure ...
  4. Intralinks Deal Flow Predictor ...

    The Intralinks Deal Flow Predictor (DFP) is a leading indicator ...
  5. Collateralized Mortgage Obligation ...

    A type of mortgage-backed security in which principal repayments ...
  6. IRR Rule

    A measure for evaluating whether to proceed with a project or ...
RELATED FAQS
  1. What are common advantages of investing in large cap stocks?

    Learn what large-cap stocks are and how investors can benefit from common advantages of adding large-cap stocks to their ... Read Answer >>
  2. What is the difference between a REIT and a master limited partnership

    While both are prized for their dividends by income investors, there are notable differences between REITs and master limited ... Read Answer >>
  3. What is the difference between a REIT and a real estate fund?

    A real estate fund invests in securities offered by public real estate properties directly or indirectly through Real Estate ... Read Answer >>
  4. What is a good debt ratio, and what is a bad debt ratio?

    Learn about the factors that influence how investors and lenders evaluate the debt ratio for a company and why the answer ... Read Answer >>
  5. How does a stop-loss order work, and what price is used to trigger the order?

    A stop-loss order, or stop order, is a type of advanced trade order that can be placed with most brokerage houses. The order ... Read Answer >>
  6. Should I offer alternative investments to my employees?

    Learn the pros and cons of employer-recommended alternative investments and why risky alternatives, such as hedge funds, ... Read Answer >>

You May Also Like

Hot Definitions
  1. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  2. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  3. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  4. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
  5. Call Option

    An agreement that gives an investor the right (but not the obligation) to buy a stock, bond, commodity, or other instrument ...
  6. Economies Of Scale

    Economies of scale is the cost advantage that arises with increased output of a product. Economies of scale arise because ...
Trading Center