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- May 21
- 8 min read

Which Parities Should Be Traded in the Forex Market?

Updated: May 27

The Forex market is the largest financial market in the world and offers investors the opportunity to profit from exchanges between different currencies. However, the issue of which parities should be traded is an important question for investors. In this article, we will share important information about which pairs to trade in the forex market.

Which Parities Should Be Traded in the Forex Market?

What is Parity in Forex Market?

In the Forex market, parity refers to the value of one currency against another currency. For example, the EUR/USD pair shows the value of the Euro against the US Dollar. The value of this parity indicates whether the Euro is strong or weak against the Dollar. When investing in the Forex market, traders have to accurately estimate the relative value of different currencies. The pair is one of the most basic tools traders use when trading in the Forex market.

Parity prices are affected by economic and political developments around the world and change instantly. For this reason, it is important for those who want to invest in the Forex market to follow the parity movements and make the right investment decisions.

What are the Advantages of Trading in the Forex Market?

The Forex market is one of the largest and most liquid financial markets in the world and offers many advantages to investors. Here are the most important advantages of trading in the Forex market:

High liquidity: The Forex market is one of the most liquid financial markets with trillions of dollars in daily trading volume. This means that traders can trade quickly and close their positions easily.
24/5 open market: The Forex market is open 24 hours a day, 5 days a week, allowing traders to trade in different time zones.
High leverage ratio: By using high leverage ratios in the Forex market, large positions can be opened with a small amount of investment. This offers investors greater profit potential.
Low transaction costs: Transaction costs in the Forex market are quite low compared to other financial markets. Most of the time, you can trade with no commission fees.
A wide variety of investment instruments: In the Forex market, besides the exchanges between different currencies of the world, other investment instruments such as gold, oil, stocks and indices are also traded.
Instant news and analysis: In the Forex market, investors are instantly provided with news and analysis on economic and political developments around the world. This helps investors to follow the market closely.

All these advantages make the Forex market an attractive market for investors. However, like any market, the Forex market involves risks and investors should be careful about managing risks.

Which Parities Can Be Traded With?

Many currencies are traded against each other in the Forex market. However, some pairs are more traded and more liquid than others. Here are some of the most commonly traded pairs in the Forex market:

EUR/USD (Euro - USD)
USD/JPY (US Dollar - Japanese Yen)
GBP/USD (British Pound - US Dollar)
USD/CHF (US Dollar - Swiss Franc)
AUD/USD (Australian Dollar - US Dollar)
USD/CAD (US Dollar - Canadian Dollar)
NZD/USD (New Zealand Dollar - US Dollar)
EUR/JPY (Euro - Japanese Yen)
GBP/JPY (British Pound - Japanese Yen)
EUR/GBP (Euro - British Pound)

These pairs are popular with investors and are influenced by economic and political developments around the world. Investors can trade in the market by following the changes in the values of these parities. In addition, other currencies are also traded in the Forex market and investors can diversify their portfolios by trading with different parities.

What are the Points Investors Should Pay Attention to?

When trading in the Forex market, there are a few points that investors should pay attention to:

Risk management: The Forex market is a high risk market and price movements can be quite fast. Therefore, investors should use risk management strategies and risk limiting tools such as stop-loss orders to protect their capital.

Following the economic calendar: Forex market is very sensitive to economic and political developments. Therefore, investors should follow important news and data by following the economic calendars of the countries.

Technical analysis: Technical analysis in the Forex market is a form of analysis using tools such as price charts and indicators. Investors can identify price trends and market trends using technical analysis methods.

Psychological factors: It is very important that investors do not make emotional decisions when trading in the Forex market. Being patient, disciplined and sticking to the plan is possible with good planning to avoid making emotional decisions.

Spread rates: Spread rates in the Forex market affect the trading cost of traders. Low spread rates are more advantageous for investors. Therefore, it is important for investors to choose a brokerage firm by considering spread rates.

Taking these points into account, investors can make more informed and successful transactions in the Forex market.

Which are the Most Traded Parities?

The most traded and most popular pairs in the Forex market are as follows:

EUR/USD (Euro - USD)
USD/JPY (US Dollar - Japanese Yen)
GBP/USD (British Pound - US Dollar)
USD/CHF (US Dollar - Swiss Franc)
AUD/USD (Australian Dollar - US Dollar)
USD/CAD (US Dollar - Canadian Dollar)
NZD/USD (New Zealand Dollar - US Dollar)
EUR/JPY (Euro - Japanese Yen)
GBP/JPY (British Pound - Japanese Yen)
EUR/GBP (Euro - British Pound)

These pairs are the most traded in the world and have high liquidity. Investors can trade in the market by following the changes in the values of these parities. However, other currencies are also traded and investors can diversify their portfolios by trading different pairs.

Which Pairs Can Be Risky?

All parities traded in the Forex market carry a certain level of risk. However, some pairs can be seen as more risky. The main of these risk factors are listed below:

Exotic parities: Exotic parities are parities with lower liquidity levels and less traded. Therefore, price movements can be faster and harder.

High volatility: Some pairs are particularly sensitive to news and economic data. For example, GBP/USD has shown high volatility due to Brexit events.

Low liquidity: Parities with lower liquidity levels may cause more volatility in the market. Therefore, spreads may be high and transaction costs may increase.

Political risk: Political instability can cause fluctuations in the currencies of countries. Therefore, pairs with high political risks can be seen as riskier.

Global events: Global events can affect financial markets and currencies in particular. For example, events such as natural disasters, wars or terrorist attacks can cause volatility in the markets.

Trading these pairs can be high risk. However, with the right risk management strategy, investors can reduce these risks and make profitable trades in these pairs.

How to Make a Parity Selection in the Forex Market?

There are some factors to consider when choosing a parity in the Forex market. These factors are listed below:

Economic Calendar: The economic calendar includes the release dates and times of economic data. Investors can be prepared for possible effects that may occur in the market by following the data in the economic calendar.

Market Liquidity: Market liquidity refers to the volume of transactions between buyers and sellers of a particular instrument. Low liquidity can cause spreads to widen and transaction costs to increase.

Geopolitical Risks: Geopolitical risks refer to the risks caused by political and economic instability in a particular country or region. These risks may affect parity prices and cause sudden price changes.

Technical Analysis: Technical analysis is based on forecasting future price movements by examining past price movements. By using technical analysis tools, traders can identify possible trends and support resistance levels.

Fundamental Analysis: Fundamental analysis provides information about market direction by examining economic data, country policies, inflation, interest rates and other fundamental factors. Using fundamental analysis data, traders can predict whether a pair will increase or decrease in value.

When choosing a pair, it is important for investors to consider their investment objectives, risk tolerance and market views. Investors must understand the relationships between different currencies and use risk management strategies to make successful trades.

What are the Basic Forex Terms Investors Should Know?

There are some basic terms traders may encounter when trading in the Forex market. Knowing the meanings of these terms allows investors to trade in the market more comfortably. Some basic Forex terms are listed below:

Lot: A term used in the Forex market to express the size of the trade. A lot usually refers to a transaction size of 100,000 units.
Spread: The difference between the bid price and the ask price for a currency pair. The spread covers the transaction costs of Forex brokers.
Margin: In the Forex market, it is the amount of collateral that traders must keep in their accounts to trade. Margin represents the capital required for investors to maintain their open positions.
Pip: The smallest unit used to measure price changes in the Forex market. Pip refers to the smallest change in the price of a currency pair.
Stop Loss: An order used to limit the loss of a trade. A Stop Loss order ensures that an open position is automatically closed at a price level set by the trader.
Take Profit: An order used to limit the profit that can be made from a trade. The Take Profit order ensures that an open position is automatically closed at a price level set by the trader.
Swap: A trader's move of a position bought or sold for a currency pair for the next day. Swaps are formed depending on the interest rates in the Forex market.
Margin Call: A call made by a Forex broker when an investor does not have sufficient margin for their open positions. A margin call indicates that the trader must close any open positions in his account or deposit more funds into his account.

These terms are basic terms that are frequently used in the Forex market and that investors should know. Investors' understanding and use of these terms enables them to make more informed and successful trades in the market.

What Should Be Considered To Be Successful In The Forex Market?

Forex market is a market that offers high profit opportunities but also high risks. To be successful, investors need to pay attention to some important points. Here are some important points to consider in order to be successful in the Forex market:

Learn Forex Market: Having a good understanding of the Forex market is one of the most important steps to success. Having information about the functioning of the market, the characteristics of the parities, technical analysis and fundamental analysis methods will help you make the right decisions in the market.

Make a Plan: To be successful, you must first make a plan. Set your goals, measure your risk tolerance and create an investment strategy. It's also important to stick to your plan.

Pay Attention to Risk Management: To be successful in the Forex market, risk management is essential. Determine your position sizes and use stop loss orders for each trade. Also, risk only some of your capital and do not panic to recoup your losses.

Perform Technical Analysis: Technical analysis is an essential tool for trading the Forex market. It helps you make the right decisions by analyzing trends and price movements on the charts. Learn different indicators and patterns and follow prices.

Pay Attention to Your Psychology: Being successful in the Forex market is not just based on technical and fundamental analysis. Your psychology is also important. Don't panic, be patient and keep your emotions under control. Also, accept your losses and celebrate your successes.

Stay Up-to-Date: Follow the developments in the Forex market and read the news regularly. Monitor the data on the economic calendar and review the reports. This helps you understand the reasons for price movements and helps you make the right decisions.

As a result, learning, planning, risk management, technical analysis, psychology and staying up to date are essential to be successful in the Forex market.

What Should Be Considered To Be Successful In The Forex Market?

Conclusion and Recommendations

Investing in the Forex market is a process that needs to be done carefully and consciously, even though it offers high earning opportunities. Investors should have a good understanding of the dynamics of the market, investment tools and risks, choose the right pairs and create an effective investment strategy.

However, investors must also face the fact that they can always experience losses. Therefore, they should use appropriate risk management strategies to protect their capital.

To be successful in the Forex market, it is important to be constantly in the process of learning and improving. Regularly following market news, improving technical analysis skills and testing investment strategies can increase traders' chances of success.

All in all, the Forex market is an investment tool that offers high earning opportunities but should be approached with caution. If investors approach with the right knowledge, experience and strategy, their chances of being successful in the Forex market may increase.

Read :

Strategies in Forex: Which Strategy Is Right For You?

The Way to Increase Your Earnings in the Forex Market: Money Management