The world of currency trading may seem exotic to many of us, but it is becoming more and more commonplace for casual investors to branch out into this exciting market. The attraction is that the forex (foreign exchange) market offers high levels of liquidity, making it easy to buy and sell currencies. And this is due to its vast size.
Just how big is it? The forex market is in fact the largest in the world, dwarfing the stock market. Because trading takes place on a worldwide basis, forex is also a market that never sleeps – perfect for night owls who like to trade in the evenings. So, if you are looking to make an investment in 2019, this might be something to consider.
How Forex Trading Works
At its most basic level, the forex market is all about currency pairs. This is the quotation between two different currencies, indicating how much of one is needed to purchase a unit of the other. When these are traded using a reputable trading platform like Equiti then profit can be made for the investor.
But which currency pairs should you choose? Ultimately, the decision is yours to make. However, it might help to study the pairs below, which could be regarded as essentials for 2019.
The Euro against the US Dollar is the most traded currency pair in the world and as such cannot be ignored. It is affected by many of the major events taking place on the world stage, as well as by the actions of the European Central Bank (ECB) and the Federal Reserve (Fed). Because this currency pair is traded so often, it is considered to have relatively low volatility. Along with this, it is possible to find plenty of information online about the movements of the pair. All of this adds up to it being a good choice for beginner traders.
The US Dollar and Japanese Yen pair is another popular choice for traders and a good option for beginners. With its high levels of liquidity, it remains relatively stable. It is also heavily traded during Asian business hours, giving you the chance to monitor your investment when it suits you.
The US Dollar / Swiss Franc pair may not be as liquid as the other two pairs mentioned in this list, but it is still a good choice for beginners in 2019. This is because the Swiss Franc is the go-to option for investors during political instability or economic uncertainty. There is no telling what might happen in the future, but it is usually a good idea to choose a cautious approach.