Understanding Major Currency Pairs in Forex Trading

The majors are a group of currency pairs that play a vital role in the Forex market. In order to trade in the Forex market, you will have to have a basic understanding of currency pairs. Here are the basics of the major currency pairs and what they mean to you as an investor.

Currency Pairs

A currency pair is a combination of two different foreign currencies. In Forex trading, you will be dealing with a base currency and a counter currency in each pair. For example, on the currency pair EUR/USD, the euro is the base currency and the US dollar is the counter currency. All of your dealings will involve two different currencies. You will simultaneously be buying one currency and selling the other on any given trade.

The Majors

The majors are the currency pairs that represent the most commonly traded currencies in the world. These pairs represent about 85 percent of the trading that goes on the market. When trading these pairs, you may find high liquidity, compared to other currency pairs. This means that you will be able to get the best pricing and a quick return of any Forex trades that you have with these pairs.