Which currencies should you trade?

As with most things financial, the decision about which currencies you should trade will depend on your personal circumstances, objectives and risk profile. Just as we wouldn’t tell you the groceries you should buy on a weekly basis, we will not tell you which currencies are right for you to trade. Indeed, any such decision will also depend on the opportunities available in the market at any given time.

This aside, unless you have some particular reason for doing otherwise, you are probably better off sticking to the majors plus a few of the larger crosses. Trading in these extremely liquid currency pairs offers several advantages, the main one being that they will typically show the narrowest bid/ask spread. Don’t worry just at this point — we will explain what is meant by spreads in further detail later in the book — but for now suffice to say the benefit of a narrow bid/ask spread is that it makes it very cheap to trade these pairs. Also, if you are looking for research materials to support your trading decisions, it will be significantly easier to find information on the major pairs and crosses than it will be to find information on m....