Forex Market
have received several questions from a stock trader that is interested in trading the Forex markets, with the following being one of the questions :
From your experience which is the best forex market to trade in terms of liquidity and trading opportunities?
Before I answer the question, please note that I do not recommend the Forex markets for day trading (unless you actually want to hold onto the new currency). The main reason for this is that the Forex markets are not provided by an exchange (i.e. they are not centralized), which means that they are often provided by unscrupulous brokers, who modify the prices and trade against their clients. These brokers are usually advertised as "No Commission" brokers, because they do not charge commission for trades, but take profit away from the trader instead.
Now for the answer to the question. If you are going to trade the Forex markets (hopefully with a reputable broker), the most liquid and active markets will be :
- EURUSD - Euro to US Dollar
- GBPUSD - British Pound to US Dollar (also known as Cable)
- USDJPY - US Dollar to Japanese Yen
- EURGBP - Euro to British Pound
- USDCHF - US Dollar to Swiss Franc (also known as Swissy)
- EURCHF - Euro to Swiss Franc
All of the above markets have very high daily trading volume (in the millions), and have large enough daily ranges to provide several trades per day.
The stock trader who asked this question also had a few more good questions, and I will answer these shortly in additional blog entries.
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