There are over 170 currencies in the world, but most forex volume concentrates in a handful of pairs. Understanding the categories helps you pick instruments that match your strategy and avoid illiquid traps.
Major Pairs (The Big 7)
Majors all include USD on one side. They have the tightest spreads, highest liquidity, and cleanest price action. These are what most beginners should trade.
| Pair | Nickname | Why it moves |
|---|---|---|
| EUR/USD | Euro | Most traded, ECB vs Fed |
| USD/JPY | Ninja | Risk sentiment, BoJ policy |
| GBP/USD | Cable | Volatile, BoE vs Fed |
| USD/CHF | Swissy | Safe haven flows |
| AUD/USD | Aussie | Commodity-linked (gold, iron) |
| USD/CAD | Loonie | Oil-linked economy |
| NZD/USD | Kiwi | Dairy & RBNZ policy |
Cross Pairs
Cross pairs have no USD. They can offer good volatility and diversification, but spreads are wider and liquidity lower. Popular crosses: EUR/GBP, EUR/JPY, GBP/JPY, AUD/JPY.
GBP/JPY (the "Beast") is one of the most volatile pairs — it can move 150+ pips in a day. Great for experienced traders, brutal for beginners. Start with EUR/USD instead.
Exotic Pairs
Exotics pair a major currency with one from an emerging market — USD/TRY, USD/ZAR, EUR/TRY. They can have huge daily ranges, but spreads are enormous and liquidity thin. Avoid these as a beginner.
Beginner Recommendation
- ▸Start with EUR/USD — tightest spreads, most predictable, tons of analysis available.
- ▸Add USD/JPY once you understand risk — different timezone behavior, good for Asian session.
- ▸Avoid GBP and JPY crosses until you have 50+ trades of experience.