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How to Pick the Best Forex Currency Pair?

Every trading involves a currency pair. A currency pair got of two different currencies involved in the trade. Some of the popular currency pairs are EUR/USD and USD/CAD. So which one is the best currency pair for foreign exchange trading? There are primarily 2 factors that you must take into account when deciding the best forex pairs for trading. These factors are activity and the foreign exchange trading systems. First let us see the volume part.

The Most Traded Forex Currency Pairs?
If you are new at forex the best ways to start trading is by selecting the most active currency pairs. Many gurus will suggest you to do so due to numerous reasons. The 1st factor is that heavily traded currency pairs have high liquidity and this means that your stops will more regularly met without slippage. Besides, in case of foreign exchange pairs which are really active in the market, the costs tend to be lower. When massive number of traders are trading in the foreign exchange   market it creates a tighter spread, and there is also tough war between forex brokers which will help to keep the fees lower.
So does this mean we only require to look into the most traded foreign exchange market and pick the currency? Nope. If you are new to Fx trading you may be surprised to hear that the most voleme Fx trading floor is London, UK and not New York. But the most traded currency globally is of course US dollar. Now one might conclude that US Dollar, GBP (British Pound) pair is the most active foreign exchange in the forex market. This is not correct. In fact EUR/USD currency pair is the most traded foreign exchange pair. The next most traded currency pair is USD/JPY and the third is GBP/USD pair.

Best Currency Pairs for Your trading System
The primary factor in choosing the foreign exchange pair is of course the activity level and your understanding about the financial conditions of a particular forex currency. Your forex system also could be a factor in selecting the forex pair. You might have the best Fx trading system, but if you select the poor performing currency pair you might end up with poor results.
For example if your forex trading system involves the use of automated forex robot, you will most likely find that the particular currency trading EA is set to work with a small number of foreign exchange pairs and that the most active currency pair might always gives you the best results. For instance, you may know that Forex Autopilot turbo which a popular forex software now in the market is set to trade Euro British pound and Euro Swiss Frabc currency pairs. However most users noticed that they are able to get better results with EUR/CHF pair though EUR/GBP more active pair here. Eventhough one can trade various currency pairs with a robot, a particular forex robot is always tend to give better profits with its currency pair.
So in such cases one should pick a foreign exchange pair which is right for your trading system even if it is not the most active currency pair. There is a new forex software called Ivybot which gives 4 separate Fx trading EA in which each one is designed to perform well for a specific currency pair. You can see the Ivybot review here.