What Currencies Are Traded in Forex?
By: Ashley
The player will show in this paragraph
This lesson is about what currencies are traded in Forex.
The Forex OTC market is traded globally by millions of individuals and organizations. It is the biggest and most popular financial market in the world.
The chart below shows global foreign exchange activity. As of April 2007, the US Dollar is the most traded currency, being on one side or the other of 86.3% of all transactions. The Euro’s share is second at 37%, while that of the yen is at 16.5%. Yes, we know that just the three of them already exceed 100%. You have to remember that Forex is traded in currency PAIRS, and the percentages posted by the bank survey total 200%. But even so, you can see that the top three traded currencies take up a lot of the market!
The 7 most popular currencies (in order of popularity, or volume traded) along with their symbols are shown below:
| Symbol |
Country | Currency |
| USD | United States | Dollar |
| EUR | Euro members | Euro |
| JPY | Japan | Yen |
| GBP | Great Britain | Pound |
| CHF | Switzerland | Franc |
| AUD | Australia | Dollar |
| CAD | Canada | Dollar |
As we stated earlier, Forex is simply buying and selling currency. Placing a trade in the FX market is very similar to those found in other markets, like the stock market, and especially the futures market. When trading on the FX market, you exchange one currency for another and as the price changes, your security value will increase (or decrease) in value.
The first thing you need to understand is that FX Trading means you are actually trading currency pairs. You are buying one currency while simultaneously selling another currency. Above we showed you the 7 most popular currencies traded on the market and referred to trading pairs. Here are the 7 most commonly traded PAIRS in the Forex market:
- EUR/USD which stands for Euro / US Dollar
- USD/JPY which stand for US Dollar / Japanese Yen
- GBP/USD which stands for British Pound / US Dollar
- USD/CAD which stands for US Dollar / Canadian Dollar
- AUD/USD which stands for Australian Dollar/US Dollar
- USD/CHF which stands for US Dollar / Swiss Franc
- EUR/JPY which stands for Euro / Japanese Yen
The reason these are the most commonly traded pairs is simple. Only the most economically/politically stable and liquid currencies are demanded in sufficient quantities. The good news is that even with just these seven pairs, you can find more than enough potentially profitable trades to make you financially successful.
There are many other currencies available to trade. However, we at PipsAngels concentrate on the "Majors", as they are potentially the highest-probability, lowest-risk trades. And trading Forex is all about making profits!
That sums up our lesson on what currencies are traded in Forex. Keep learning and mastering Forex here at PipsAngels.com. See you soon!
