What is traded in Forex? The most popular currency pairs

11.11.2022

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Grand Capital shares the experience of traders: what pairs professional traders choose for intraday trading. Top 3 instruments for your trading.

1. Gold (XAU/USD)

Gold is one of the most popular instruments for intraday traders and fights for the first-place trading pair alongside EUR/USD.

Why do traders love gold?

  • Gold is a liquid asset: this metal is always in demand; a trader can quickly sell it at the market price.
  • Gold is considered a defensive asset: when national currencies depreciate, investors tend to invest in gold during a crisis.
  • Gold refers to a universal value relative to the national currency of any country.

The value of gold is monitored by financial markets around the world. Gold had been the basis of the market economy for many hundreds of years. It was so until the gold standard was abolished. This led to the emergence of fiduciary money, the nominal value of which is set and guaranteed by the state, regardless of the value of the material from which this money is made. 

In the periodic table of chemical elements, gold is denoted by the symbol "AU", and the US dollar is the common criterion for measuring the value of gold throughout the world.

At the same time, gold trading has its drawbacks. The main disadvantage is price stagnation. Gold as a metal is not the most profitable asset for long-term investments. If for forty years the average return on American stocks has grown by 8% per year (statistics for 1926-2018), then gold has grown only by 3-3.5% over the same period (statistics for 1979-2019).

But for intraday trading, it is the perfect instrument.

Trade XAU/USD with Grand Capital and receive +40% for each deposit.

Trade

2. EUR/USD

One of the most popular currency pairs among traders, and one of the most traded. It occupies a very significant share of the Forex market: various sources give figures around 22-32%.

Why do traders love EUR/USD? Because the pair has very high volatility, which allows you to earn good profits with proper skills.

What are the cons:

  • Predicting the dynamics of this pair may be too difficult for a beginner: the quotes are highly random due to a large number of players.
  • Periodic changes in direction are caused by the actions of many professional traders from around the world.

Trade EUR/USD with Grand Capital and receive +40% for each deposit.

Trade

3. GBP/USD

Another favourite instrument shares a significant 12–16% of the market. 

GBP/USD pair features:

  • 1. instrument is capricious, with high volatility of up to 120 points and instability of quotes.
  • 2. Very sensitive to any movements of the Bank of England and the economic statistics of the UK and the US. The pair shows the maximum level of liquidity during the trading sessions in Europe and the United States. It is positively correlated with EUR/USD and negatively correlated with USD/CHF.
  • 3. High volatility sometimes causes a correlation breakdown, but the pair's unstable behaviour provides many opportunities for professional traders who specialize in short-term speculative transactions.

Trade GBP/USD and receive +40% for each deposit.

Trade

Author: GC
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