Major pairs in Forex are the most traded currency pairs in the world, and it is estimated that trading on those currencies represents over 80% of the whole foreign exchange market. In this article, you will find out which currency pairs those are, how the forex market works, and how you can use your newly gained knowledge to enter the markets more confidently.
What Is a Currency Pair?
A currency pair is made of two currencies traded in the forex market. Here’s what you need to know to understand how trading currencies works:
- All currency pairs are quoted in terms of one currency versus another.
- Each currency pair has a ‘base’ which is the first denoted currency, and a ‘counter’ which is the second denoted currency.
- Each currency could strengthen (appreciate) or weaken (depreciate). As there are two currencies in each pair, there are essentially four variables you are speculating on when it comes to currency pairs.
- There are major currency pairs, minor and exotic currency pairs.
Placing a Trade on a Currency Pair
When you place a trade on a currency pair, you’re essentially buying one currency and selling another - but in a single transaction. So for example, going long or ‘buying’ EUR/USD means you’re buying the euro and selling the US dollar. Going short means that you’re ‘selling’ the euro and buying the US dollar.
Currency values rise (appreciate) and fall (depreciate) against each other due to a number of economic, geopolitical and technical factors. The forex market is the most traded market in the world, with an average turnover in excess of $5 trillion a day. This makes it a highly volatile market and it’s available to trade 24 hours a day, five days a week (Monday to Friday).
Which Are the Major Pairs in Forex?
Currently, the most traded currency pairs in the world are EURUSD, GBPUSD, USDCHF, USDJPY, AUDUSD, and USDCAD. It is estimated that trading on those currencies represents over 80% of the whole foreign exchange market.
Check our Instrument Specification to see which currency pairs you can trade on with XTB.
This content has been created by XTB S.A. This service is provided by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, entered in the register of entrepreneurs of the National Court Register (Krajowy Rejestr Sądowy) conducted by District Court for the Capital City of Warsaw, XII Commercial Division of the National Court Register under KRS number 0000217580, REGON number 015803782 and Tax Identification Number (NIP) 527-24-43-955, with the fully paid up share capital in the amount of PLN 5.869.181,75. XTB S.A. conducts brokerage activities on the basis of the license granted by Polish Securities and Exchange Commission on 8th November 2005 No. DDM-M-4021-57-1/2005 and is supervised by Polish Supervision Authority.
