Most Traded Currencies, and Optimal Trading Hours
Leveraged CFDs, the most traded currencies, and the best market hours for trading forex are key factors that every trader should understand for successful trading.
In the vast and liquid forex market, where currencies are exchanged for profit, leveraged CFDs have become a popular choice for traders looking to maximize their returns. With a daily turnover of $6.6 trillion in 2022, the forex market offers ample opportunities for both beginners and seasoned traders.
MetaTrader 4 (MT4) remains the preferred platform for forex trading, providing traders with access to a demo account to learn about concepts like CFDs, volatility, and technical analysis. Developing a solid trading style and risk management strategy is crucial before venturing into live trading.
To optimize trading outcomes, traders need to be aware of the most actively traded currencies, known as the Majors, which account for over 85% of forex market transactions. These include the US Dollar (USD), Euro (EUR), Yen (JPY), Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), Australian Dollar (AUD), and New Zealand Dollar (NZD).
The US Dollar, being the world's reserve currency, remains highly influential in the forex market. The Euro, with its stable price swings, is favoured by traders. The Yen, although unpredictable, offers attractive trading opportunities and serves as a safe-haven currency. The Pound, driven by the UK's economic decisions, exhibits higher volatility. The Swiss Franc, known for its safe-haven status, is traded against high-yielding currencies. The Canadian Dollar's strength is linked to Canada's economic health and commodity markets. The Australian Dollar, influenced by the Reserve Bank of Australia and commodity prices, is closely tied to China's economy. Finally, the New Zealand Dollar, impacted by the Reserve Bank of New Zealand, is popular for carry trade strategies.
Understanding the forex market's 24/5 trading hours and overlapping sessions is essential for planning effective trading sessions. Traders should identify major trading sessions to align with their trading strategies and take advantage of increased market activity during those times.
In conclusion, leveraging CFDs in forex trading, understanding the most traded currencies, and strategically planning trading sessions are vital components for success in the dynamic and lucrative forex market.