Choosing a pair

What you can trade

There are several categories of pair you can trade from a forex account: currency pairs, index pairs and commodity pairs, and on most brokers crypto pairs too. Each is quoted and traded the same way, as one thing priced in another, with a bid, an ask, a spread and a pip.

What to weigh

When choosing a pair to trade, there are several factors to consider:

• Liquidity: how much is traded, which decides the spread and how cleanly orders fill.
• Volatility: how far the pair moves in a session, which decides how wide a stop has to be.
• Correlation: how the pair moves with the others you hold, so two positions are not one bet twice.
• Economic fundamentals: the rates, data and events that drive the two currencies.

To trade a pair you open a position on it, long or short, through your broker's platform, with the size in lots, the direction, and the stop loss and take profit levels that manage the risk.

Choosing the right pair is a decision to make on those four factors, not on habit.

Follow the pairs you chose

Add the pairs you trade as your symbols on the Fundamentals page. The news, the calendar and the positioning reports then filter to those pairs, so the fundamentals behind your choice stay in front of you.