What pairs to choose for a beginner binary options

If you are going to start trading binary options directly, the first thing a trader should do is to choose a trading asset. It is the movement of its quotes that will need to be correctly predicted in order to make a profit. However, not all assets are the same in forecasting, so now we will find out which trading instruments are best for a beginner to work with.

Often, beginners choose a currency asset class at the start of trading, and this is the right decision, since in order to trade on stocks, you must at least have a basic understanding of the stock market and the specifics of its work. Of course, to predict the value of currency pairs, it is also necessary to understand the nuances of the foreign exchange market, however, this type of asset is more convenient for beginners in terms of choosing the right trading time and strategy.

First, let’s understand what currency pairs are. So, trading in all currencies takes place in a pair, where the first currency is the base and the second is the quote. The order of displaying currencies in a pair is regulated by ISO — this is a serious international organization that has established a specific and invariable display order.

There are three types of currency pairs:

  • «majors» (main, in which the dollar is present)
  • cross-rates (assets in which there is no dollar)
  • exotic (pairs with currencies of small European, African and Asian countries)
Suitable currency pairs for beginners
Suitable currency pairs for beginners — Currency pairs on Binomo

What are the currency pairs

«Major» currencies

Such assets are the currencies of the most economically powerful countries in the world. At the same time, in each pair, the dollar acts as the base or quote currency. All «majors» are highly liquid, since it is through them that the largest volume of trading operations is carried out on the market.

For example, the most popular is EUR/USD, but this does not mean that it is easy to predict. This currency pair is affected by the release of the largest number of macroeconomic news, which is why its price often becomes unpredictable. Therefore, trading on EUR/USD is highly discouraged for beginners.

Representatives of this type: EUR/USD, USD/JPY, USD/CAD GBP/USD, USD/CHF, AUD/USD, NZD/USD.

Cross rates

There is no dollar in such currency pairs, but most of them are first exchanged for dollars and only then for other currencies. That is why they are called cross-pairs. For example, to exchange the euro for the Japanese yen, it must first be exchanged for the dollar and only then for the yen.

Representatives of this type: GBP/JPY, EUR/GBP, AUD/CAD, EUR/NZD

Exotic assets

Exotic currencies are rarely seen on brokerage platforms due to low liquidity, which makes them uninteresting for traders. Examples of such currency pairs are USD/SEK, USD/ZAR, EUR/TRY.

Suitable currency pairs for beginners

In fact, novice traders can start working on any pair other than the euro / dollar, since, as mentioned earlier, this asset often has an unpredictable fever that is difficult for even an experienced trader to cope with. One of the most predictable and stable currencies is the pound, so for starters, you can choose pairs such as GBP/USD and GBP/JPY. These pairs are characterized by moderate volatility, so classical approaches of technical analysis are suitable for their forecasting.

In general, for effective binary options trading, it is necessary to choose currency assets in accordance with the requirements of the trading strategy. For example, if the strategy is trending, then you need to choose a currency pair whose market is trending, and if the system is designed for a sideways trend, then you should look for currency pairs where the price is currently in a flat. In this case, even not the most easily predictable pair will provide a very good result. At the same time, the main thing is not to overestimate your skills and clearly follow all the conditions for concluding a deal.

So do not forget that different currency pairs have different reward percentages.

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