Which Forex Pairs To Trade – Day Trading And Swing Trading

Which pairs you opt to day trade or swing trade will depend on your trading style. We’ll talk a bit about that, and then discuss which forex pairs to trade. 

Main Takeaway Points

  • 1-minute chart day traders, focus on trading one pair well. The EURUSD is recommended. If it is really quiet for many days (moving less than 40 pips per day), consider trading the GBPUSD, but only trade one pair at a time (unless you have automated strategies that don’t require a lot of individualized attention).
  • Day traders trading 5-minute or higher charts, or that use partially or fully automated strategies, trading more than one pair is acceptable. But keep it manageable.
  • Swing traders, consider looking through multiple pairs. Each trade lasts hours to days or weeks, so there is lots of time to look through charts and find other trading opportunities. Pairs to consider are laid out in the chart below.
  • There is no reason to overwhelm yourself. It is better to trade really well on the trades taken, than to take too many trades or try to analyze too much and trade poorly.
  • Whenever trading more than one pair at once, be aware of correlation! Highly correlated trades increase risk, while inversely correlated trades may reduce profit potential.

Which Forex Pairs to Trade Based on Trading Styles

The less time a trade lasts, the more attention that strategy requires. A day trade that lasts 3 or 4 minutes requires steady focus. That trade will be exited and there may be another opportunity, or possibly the exit requires a manual action on the part of the trader.

If trades last a few days, there isn’t a lot to do while that trade is happening. The trader may look for more trades, but this may only take 20 minutes a day, and then the work is mostly done on that trade for the next several hours or days.

Next, we need to consider if the trader actively manages the positions, or if they set stop losses and profits targets and then leaves the trade alone. Actively managing a trade—determining when to exit in real-time—takes a lot more focus than setting a stop loss and profit target and walking away.

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Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using ...

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