Best Currency Pairs to Trade in Binary Options
When trading binary options, traders have a wide variety of assets to choose from such as stocks, currency pairs (which is forex), indices and commodities. The opportunity to trade currency through the binary options market as apposed to trading directly on the Forex market offers benefits such as trading different currencies 24/7, simple risk managements and access to the biggest financial market in the world.
Trading currencies is the most common underlying binary options assets in binary trading. Traders are able to place trades in USD/EUR and USD/GBP for instance as well as others available. The idea is to know the best currency pairs to trade in binary options. Traders who want to place trades in currencies would be wise to follow the latest market news to get an idea of how the market reacts to different events such as natural disasters and political events.
Benefiting from Not One, but Two Currencies and Economies
When traders use a particular currency pairs in binary options trading, they benefit from the performance of two difference currencies as well as two different economies. Trading of currencies in the binary options market is far simpler than trading on the Forex market. There has always been a worldwide debate about the best currency pair to trade with.
Deciding on the best currency pair to trade depends on the preference given to the time of the trade. There are a number of factors that have a major impact on certain currency pairs, and economic data such as inflation reports, retail sales and customer confidence reports can be deciding factors about whether trade happens.
The most advanced economies in the world offer sought after currencies, and there are some frequently used currency pairs:
Most Popular Currency Pairs
- The EUR/USD currency pair has the best liquidity and the highest order flow. The amount of volatility is lower than EUR/USD currency pairs. This pair is suitable for beginners in binary options trading.
- The AUD/USD and USD/CAD – known as commodity currency pairs. The prices of these currencies rely on the price of oil and gold in the international market. The liquidity of these pairs is somewhat lower than the EUR/USD pair.
- The GBP/JPY pair is a good choice for experienced binary options traders and is very volatile, more so when the Japanese government publishes new economic data which results in uncontrolled movement in the currency values.
- The GBP/USD is a stable currency pair with good liquidity and movements, especially for beginners.
Trading currency pairs by using binary options isn’t complicated – you just need at least some knowledge of technical and fundamental analysis to identify signals that help with predicting the price movement of a specific currency pair. There are many currency pairs available, but most seasoned traders stick to just a few so that they can track signals and perform thorough fundamental and technical analysis on each pair.
Get to Know the Compatibly Paired Currencies
It is suggested that beginners focus on the EUR/USD and the GBP/USD currency pairs. If you’re new to forex trading and you want to know the strategies in more detail, there are good books to read, but sometimes it is easier and certainly quicker to look at videos provided by different binary options trading websites.