Master Profits with Top Tradeable Currencies: Learn How to Capitalize

currency trading

Master Profits with Top Tradeable Currencies: Learn How to Capitalize

The world’s largest forex economy belongs to the US dollar. But that’s not all. There are other options like EUR and JPY that you can lean on and gain overwhelming success. However, in all cases, no matter which currency you choose, you need a good strategy to follow.

Undoubtedly, the world’s most tradable currencies have profits. But acing them isn’t easy due to the huge competition. You will need a clear direction and continuous monitoring to get the profit out of the most tradable FX currencies.

So, our goal here is to tell you more about the most profitable trading currencies and share tips on how you can make profits. Let’s get into it!

The World’s Most Tradable Currencies 

The major currency that always stays ahead of the curve is the US dollar. The daily volume for the US dollar is 88% of all currencies traded internationally. But, some other currencies are not so far from the US dollar. So, here are the top 5 currencies that can gain you profits in the FX market.

1.  US Dollar

Disseminated by the Federal Reserve, the US dollar has one of the largest trading histories globally, with a daily average volume of US$2.9 trillion. The US dollar is also sometimes referred to as the greenback. Economic fundamentals, including gross domestic product, and manufacturing and employment reports support this currency.

However, the central bank influences the dollar a lot. The reason behind the popularity of the dollar in the currency market is that the US holds the world’s largest economy. Also, as many commodities are priced in dollars, like gold, oil, and copper- the reason behind the popularity is obvious.

2.  Euro (EUR)

The euro is the second most traded currency after the US dollar. It has a daily average volume of nearly US$1.1 trillion. European Central Bank issues and handles the Euro.

The euro is mostly popular in the eurozone. This includes 19 of the 28 countries within the EU, excluding the UK and Denmark. Interestingly, is also the world’s second-biggest reserve currency. Compared to the British pound or Australian dollar, the euro tends to be a slower currency against the USD.

3.  Japanese Yen (JPY)

This holds the third position being one of the most popular trading currencies, with a daily average volume of US$554 billion. One interesting fact is that it is also the third largest reserve currency.

Japan’s economy and manufacturing sector highly influence the yen’s value. Therefore, traders may pay attention to the economic releases and make decisions based on that. Also, as China is the direct competitor in this sector, they also pay attention to the Chinese renminbi. Traders can take technical perspectives on a longer-term basis depending on the Yen.

4.  British Pound (GBP)

Like the Federal Reserve System in the United States, the Bank of England (BoE) is basically the UK’s central bank. The crown appoints the Court of Directors to take the crucial decisions.

This is one of the most traded currencies. However, the market of this currency is quite crazy as it changes very frequently, even more than the Euro some days. If you are looking for an enthusiastic currency, this is it!

5.  Australian Dollar (AUD)

In the Commonwealth of Australia, the Australian dollar serves as the official currency. This currency is the fifth most traded currency internationally. The average daily trading volume for this currency is US$223 billion.

On top of that, Australian dollars are the sixth most used reserve currency. The value of commodities and other “terms of trade” factors significantly into the value of this currency.

Thus, the price shifts of commodities like coal, iron, and copper can influence trading. The extent to which the government owes money abroad is another noteworthy fact. If it increases, the value of AUD will fall greatly.

Most Profitable Currency Pairs To Trade

When you are looking for the best currencies for currency trading, we have got your back. Here are the characteristics of some currency pairs that occur to be the most profitable.

EUR/USD (Euro/US Dollar)

EUR/USD is one of the most traded currency pairs internationally with high liquidity. You will see most traders vouching for this. The popularity makes this currency pair one of the easiest ones to execute trades without significantly impacting the exchange rate. Also, this one has low spreads which makes it cost-effective during trading.

USD/JPY (US Dollar/Japanese Yen)

Here is another currency pair that you can choose with the volatility. The frequent and significant price movements will provide you with numerous opportunities to make profits. However, this requires extensive risk management strategies as well.

GBP/USD (British Pound/US Dollar)

More opportunities arise for traders when this pair demonstrates big price swings. The fact that it provides technical predictability is an additional perk; this makes it much easier to make informed judgments with the use of technical analysis tools like charts and indicators.

AUD/USD (Australian Dollar/US Dollar)

The Australian dollar is believed to be a commodity currency. As we said above, its worth is closely connected to the costs of different items. Thus, traders often check up on the gold prices to make decisions about this currency.

USD/CAD (US Dollar/Canadian Dollar)

Unlike AUD, the USD/CAD is greatly influenced by oil prices. So, the oil market can give traders an idea about how and when to trade. Due to the clear indications, this currency pair gives traders a clear strategy to make.

Strategies For Profitable Trading

You need to understand the trading psychology to make a good profit out of trading. Even if you have chosen the most profitable currency, you won’t get good luck unless you craft a good strategy. Thus, here are some tips to help you out.

Market Trends With Technical Analysis

If you want to make a profit using currency trading, you need to focus on the trend direction. Technical analysis is essential for traders, they must use tools like moving averages, support and resistance levels, and chart patterns. The patterns and data help traders to make rational decisions.

Market-Related Currency Pair Selection

Traders need to make informed decisions using current market circumstances. This helps to know which currency pairs are profitable at the moment. Furthermore, safe-haven currencies, such as the US dollar and the Japanese yen, perform well when market circumstances are unpredictable. Besides, during economic expansion, the Canadian dollar and the Australian dollar do well.

Risk Management Techniques

This is a must when you want to do well in trading. You need to adapt to effective risk management techniques. You can minimize your losses through this. Using a stop-loss order to immediately fill at the best market price as soon as the specified price is achieved is a great way to deal with losses.

Understanding When To Get Out Of A Trade

One of the most important trading psychology to adapt to is the comprehension of getting out. You need to know when you need to stop. Thus, you can maximize your earnings while minimizing losses.

Bottom Line

No matter how much you research about the most tradable currencies, it will all go in vain without a proper strategy. So, after doing your research, keep the strategy in mind. Remember that successful trading requires you to have an effective risk management strategy. Keep everything within your reach and get to the game!

 

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