How to Pick the Best Currency Pair?

Do you know what is a currency pair? A currency pair consists of 2 foreign exchange currencies involved in a trade. Example of currency pairs are EUR/USD and USD/CAD. Now what is the best currency pair for forex trading? There are mainly 2 factors that you have to keep in mind when picking up the best forex currency pairs for Fx trading. These factors are trade volume and the Fx trading systems. Now let’s see the trade volume part.

The Most Traded Forex Currency Pairs?
One of the best ways to begin forex trading is by choosing the most traded currency pairs. Lot of gurus might propose you to do so due to numerous reasons. The 1st factor is that heavily traded currency pairs got high liquidity and this means that your stops will more often be met without slippage. Besides, in case of currency pairs which are very active in the market, the costs tend to be lower. When massive number of traders are trading in the Fx trading  market it results in a tighter spread, and there is also big war between foreign exchange brokers which will in turn keep the costs down.
So does this mean we just need to look into the most active currency trading market and select the forex currency? Not really. If you are new to forex you may be surprised to know that the most active forex floor is not New Yoky, but London. However the most traded currency globally is of course US dollar. Now you must be thinking that US Dollar, GBP (British Pound) pair is the most traded foreign exchange in the forex market. This is not true. Actually EUR/USD currency pair is the most traded currency pair. The next most traded foreign exchange pair is USD/JPY and the 3rd is GBP/USD pair.

Right Currency Pairs for Your currency trading System
The most prominent factor in choosing the currency pair is of course the trade volume and your knowledge about the economic conditions of a specific foreign exchange. Your currency trading system also could be a factor in selecting the currency pair. You might have the best currency trading system, but if you choose a poor performing currency pair you may end up with losses.
For example if your foreign exchange trading system involves the use of automated forex robot, you will most likely find that the particular currency trading software is set to work with a small number of forex currency pairs and that the most active forex currency pair may always gives you the best results. For example, you may know that FAP Turbo which the popular forex expert advisor now in the market is set to trade EUR/GBP and Euro Swiss Frabc currency pairs. In case of FAP turbo most users experienced that they are able to achieve good results using EUR/CHF pair though EUR/GBP more active pair in this case. Though one can trade various currency pairs with a Fx robot, a particular forex ea is usually tend to give better profits with its currency pair.
So in cases like this one should select a foreign exchange pair which is right to your forex trading system even if it is not the most active currency pair. There is a new forex EA called Ivybot which provides you 4 different trading software in which each one is created to perform well for a specific foreign exchange pair. You can read the Ivybot review here.