currency trading book

Top Currency Pairs That Constitute The Majority Of Forex Trading Volumes

In the forex market investors and traders trade in currency pairs. Basically a currency pair is the exchange rate of one currency in terms of the other. Each country in the world has its own official currency. Hence there are many official currencies that are used the world over. In forex market however there are only a few currencies that are actively traded.
The currencies that enjoy a huge demand in the currency trading market are those that are liquid, and stable both in economic and political terms. The American dollar for example is the most actively traded currency by virtue of size and strength of the United States.
The eight most traded currencies (not necessarily in this order) are the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY).
Currencies are traded in pairs in the forex market. From the above listed eight currencies we can derive at 27 different currency pairs. Of these around 18 pairs that are the most frequently traded ones are:
USD/CAD , EUR/JPY , EUR/USD , EUR/CHF , USD/CHF , EUR/GBP , GBP/USD , AUD/CAD , NZD/USD , GBP/CH , AUD/USD , GBP/JPY , USD/JPY , CHF/JPY , EUR/CAD , AUD/JPY , EUR/AUD , AUD/NZD
Trading in these 18 pairs constitutes majority of trading volumes in the forex market. Compared to stock market trading, where you have thousands of stocks to choose from, it is fairly simple to choose and trade forex by selecting any of these currency pairs.
With the advent of electronic trading networks, forex trading is no longer restricted to governments, central banks, hedge funds and the like. Normally these big players concentrate their forex deals largely on the 18 pairs listed above. Being most liquid and actively traded, these currency pairs should be a natural choice for retail investors while trading forex.