What Is The Hardest Forex Pair To Trade?

What is the hardest forex pair to trade?,

Key Takeaways:

  • The hardest forex pairs to trade are those that typically exhibit the greatest volatility, such as minor currency pairs that involve emerging market currencies like USD/TRY, USD/BRL, USD/ZAR, and USD/RUB.
  • The difficulty in trading forex pairs can be attributed to a range of factors, including market uncertainty, geopolitical events, low liquidity, spread, bid-ask spread, trading hours, currency correlation, news events, and market manipulation.
  • To trade difficult forex pairs successfully, it is important to understand technical and fundamental analysis, pay attention to news and events, and utilize risk management techniques such as stop loss and take profit orders.

Most Difficult Forex Pairs to Trade

Most Difficult Forex Pairs To Trade - What Is The Hardest Forex Pair To Trade?,

Photo Credits: forexbrokerreport.com by Scott White

Head to the ‘Most Difficult Forex Pairs to Trade‘ section to get a better understanding of challenging forex pairs. This section explains the various forex pairs traders use. Examples include exotic, major, minor, cross currency pairs, currency baskets, and currency indices. Check out each sub-section to learn more about forex trading. Find out which pairs are the most difficult to trade.

Explanation of Forex Pairs

Forex pairs are combinations of currency symbols representing the exchange rate between two currencies. Traders worldwide trade these currency pairs through online exchanges for various reasons, including speculation, hedging, or arbitrage.

The following table shows the different types of currency pairs:

Type Currency Pair
Major Currency Pairs EUR/USD, USD/JPY, GBP/USD
Minor Currency Pairs AUD/CAD, CHF/JPY, EUR/NZD
Cross Currency Pairs EUR/JPY, GBP/JPY, CAD/CHF
Exotic Currency Pairs USD/ZAR, NZD/HKD, SGD/MXN
Currency Baskets MXN index basket (consists of a combination of several currencies against its weighted average)

The market price and volatility of Forex pairs oscillate depending upon several factors that contribute to the difficulty in trading forex pairs. Due to high political risks and market volatility in some regions worldwide, exotic currency pairs like USD/TRY (US dollar/Turkish Lira), USD/BRL(US Dollar/ Brazilian Real), USD/ZAR (US Dollar/South African Rand), and USD/RUB (US dollar/Russian ruble) are the hardest to trade.

If you seek profitable gains by trading exotic currency pairs, you must significantly invest your time researching fundamental analysis that involves economic indicators such as interest rates, GDP growth rates. Keep track of current events concerning geopolitical factors influencing these countries’ economies. Moreover, utilize proper risk management techniques like stop-loss and take-profit orders while placing trades. Ultimately, missing out on trading the most difficult forex pairs deprives oneself of profits worth winning over with determined efforts and strategic mindsets.

Trading forex pairs is like navigating a minefield of market uncertainty, global events, and political instability with only economic data and liquidity issues to guide you.

Factors That Contribute to the Difficulty in Trading Forex Pairs

Factors That Contribute To The Difficulty In Trading Forex Pairs - What Is The Hardest Forex Pair To Trade?,

Photo Credits: forexbrokerreport.com by Stephen Moore

Trading forex pairs is challenging due to market uncertainty, global events, political instability, economic data, and market manipulation. So, we break this down into sub-sections.

The first is ‘Market Volatility’. It is about technical analysis, fundamental analysis, trend analysis, and risk management.

The second is ‘Geopolitical Events’. It involves macroeconomic factors, central bank policies, interest rates, inflation, unemployment, GDP, and more.

The third is ‘Low Liquidity’. This is about illiquid currency pairs, low liquidity, high volatility, market depth, and order book.

Lastly, ‘Time Zone Differences’. It covers execution speed, scalping, arbitrage, hedging, carry trades, momentum trading, and so on.

Market Volatility

One of the critical factors affecting Forex trading difficulty is the instability in market movements. Market conditions remain volatile, as currency pairs fluctuate sharply with no stability. Many traders avoid these erratic movements and search for currency pairs that move sideways with less volatility. Erratic price movements are primarily influenced by economic news releases, which affect supply and demand, causing fluctuations in pricing. As a result, market participants find it a lot more challenging to analyze the markets during periods of intense volatility.

Furthermore, technical analysis and trend analysis can identify current trends to identify potential entry points by predicting the future movements of prices generated through pattern recognition from historical data. However, choppy markets have traditionally failed to achieve high accuracy with technical analysis’ predictive capability, making it increasingly difficult to enter positions.

During times of volatility in trading Forex pairs, using fundamental analysis becomes necessary to identify a long-term investment opportunity. Fundamental analysis focuses on external factors like examining national economic indicators relating to inflation rates and country development plans. Combining fundamentals with risk management techniques can offer traders competitive advantages even in volatile market conditions.

To illustrate the effects of market volatility better, let’s take an example: At the beginning of March 2020, when COVID-19 started appearing globally and spreading widely across nations without any accountability; as many countries were struggling to keep economies going amidst lockdowns and nationwide curfews resulting in increased job losses, investors started liquidating their investments from emerging markets resulting in massive depreciation leading exchange rates hitting new lows repeatedly such that USD/TRY climbed almost 46% between Q1 and Q2 2020 due to massive COVID-19 cases resulting in Turkey unable to control the virus spread.

Geopolitical events have a way of turning Forex trading into a high-stakes game of Russian roulette.

Geopolitical Events

Geopolitical Risks in Forex Trading

The world of forex trading is highly influenced by geopolitical factors. With macroeconomic factors such as central bank policies, interest rates, inflation, unemployment, GDP, trade balance, consumer confidence, export data and import data all playing a part in determining price movements in the currency market, geopolitical risks can further increase volatility and unpredictability. These risks can significantly affect the value of currencies and cause significant price changes that are difficult to predict.

Geopolitical uncertainty can come from a variety of sources. Conflicts between countries, social unrest or political instability may create situations where investors turn to safe haven currencies like the US dollar or Japanese yen. For example, if tensions rise between North Korea and the United States – two major players on the global stage – this could have an impact on USD/JPY trading.

Another type of geopolitical risk comes from the imposition of economic sanctions against certain countries. When major economies decide to impose economic sanctions on a particular country over its nuclear program or human rights record etc., this can have far-reaching effects across other markets which trade with that country. Investors need to keep a close eye on these developments because such events can abruptly change currency values.

In summary, geopolitical risks pose challenges for forex traders due to their unpredictable nature. The impact of such risks can be felt across numerous global markets which makes them harder to avoid when creating a successful forex trading strategy.

Trading illiquid currency pairs is like trying to swim in a shallow pool during a tsunami – not recommended.

Low Liquidity

Trading in illiquid currency pairs can pose various difficulties and challenges for Forex traders. Low liquidity translates to low trading volume, market depth, and a small order book. As a result of these factors, the bid-ask spreads widen significantly, making it challenging to execute profitable trades.

In such circumstances, it is also common for high volatility to plague the currency pair. This condition makes stop-loss orders vulnerable to slippage or being executed at different prices than anticipated. These risks can lead to significant losses that traders must account for beforehand.

To overcome the difficulties posed by low liquidity in Forex trading, traders must be mindful of their risk-management techniques and avoid over-leveraging their positions. Maintaining strict stop-loss and take-profit orders can minimize losses and lock-in profits when price movements occur.

Moreover, using technical analysis along with fundamental analysis can also provide useful insights into potential trends and events that may affect the illiquid currency pairs’ pricing movements. By analyzing market news and events’ impact on such currencies can help traders devise a profitable entry or exit strategy despite the challenges posed by low liquidity.

Historically, many experienced traders have suffered serious losses while trading in illiquid markets due to gaps caused by pronounced price shifts. Thus being wary of this hidden danger adds more value, creating an informed approach while dealing with low liquidity in Forex trading.

Trading Forex is all about timing, but Time Zone Differences can make execution speed feel like a game of Snakes and Ladders.

Time Zone Differences

The Impact of Variations in Time Zones on Forex Trading

Forex trading is influenced by a variety of factors, with time zones being one of them. The difference in time between countries can make it challenging to execute trades profitably. Traders need to adjust their approach based on open market hours across the globe, as well as monitor news and market activity overnight. This variation in time zones requires traders to be vigilant and adapt their strategies accordingly.

Trading Hours and Market Volatility

The forex market is considered a 24-hour market that never closes because of its global nature, but this does not mean all currency pairs are equally profitable to trade throughout the day. The opening hours for markets around the world can impact how traders approach trading. For instance, European sessions are typically active from 9 AM to 5 PM GMT, with the overlap between these hours and US markets being the most volatile period of the trading day. This means that traders must adjust their strategies during these opening sessions in order to take advantage of volatile opportunities.

Liquidity and Volume

Variations in liquidity levels of different currency pairs can also impact trading results, which can be exacerbated by time zone differences. Less liquid markets may require more capital investment due to wider spreads or slippage concerns. In addition, less liquid markets may have periods where no movement occurs or where orders cannot be executed quickly enough due to lower volume levels.

Trading these forex pairs is like trying to navigate through a minefield blindfolded.

Hardest Forex Pairs to Trade

Hardest Forex Pairs To Trade - What Is The Hardest Forex Pair To Trade?,

Photo Credits: forexbrokerreport.com by Arthur Jones

Trade the toughest forex pairs with ease! Master unique trading techniques to do so. We’ll explore these difficult pairs: USD/TRY, USD/BRL, USD/ZAR, and USD/RUB. Be aware of possible problems, such as broker fees, swap rates, and slippage. Then strategize!


The pair consisting of the US Dollar and the Turkish Lira is considered to be one of the most challenging Forex pairs to trade due to various factors. These reasons include geopolitical circumstances, low liquidity, and market volatility.

When we take a closer look at historical data, we can observe that the USD/TRY pair has experienced some significant shifts over time. For example, in 2018, despite being stable for many months, it saw a sudden jump from around 3.8 to 4.97 within just a few hours due to an issue with the US-Turkey relationship.

Here’s a table showing some key features of USD/TRY:

Factor Details
Trading Hours Monday-Friday (24 Hours)
Broker Fees Varies
Swap Rates Negative swap rate for short positions
Slippage Possible during high volatility periods

Traders should consider several strategies when dealing with this challenging Forex pair. Efficient risk management techniques and keeping abreast of current events are necessary for traders who choose to deal with this currency pair.

Trading USD/BRL is like a bad relationship – you’ll never know when the fees, rates, and slippage will hit you.


The USD/Brazilian real is one of the challenging forex pairs to trade due to its volatile nature and sensitivity to geopolitical events. This pair involves trading between the US dollar and the Brazilian real.

Currency Pair USD/BRL
Market Hours 9:00 AM – 4:45 PM BRT
Average Spread 80 pips
Trading Strategy Technical and Fundamental Analysis
Challenges Geopolitical events, changing government policies, low liquidity

In addition, the Brazilian economy is highly dependent on commodity prices such as sugar, coffee, soybeans, and iron ore which can further exacerbate market volatility. However, this volatility can also provide opportunities for profitable trades if properly managed.

When trading the USD/BRL pair, it is essential to pay attention to economic data releases, political developments, and other relevant events that could affect either currency’s value. To mitigate risks associated with volatility in this pair (and other difficult forex pairs), it is recommended that traders use effective risk management techniques such as stop-loss orders and limiting exposure through proper position sizing.

Furthermore, traders should factor in broker fees, swap rates and slippage when executing trades in this pair to improve their chances of success. A combination of technical and fundamental analyses can help identify potential entry/exit points while keeping an eye on news announcements which could cause sudden price movements.

Overall, trading the challenging USD/BRL forex pair requires careful monitoring of both global economic trends as well as local Brazilian political developments to stay ahead of volatile situations effectively. Trading USD/ZAR is like trying to juggle knives while blindfolded and standing on one leg – with broker fees, swap rates, and slippage as added obstacles.


The pair consisting of the United States dollar and South African rand is one of the most challenging forex pairs to trade. The volatility of both economies, coupled with political instability and low liquidity, make it a risky option for traders.

In analyzing this difficult forex pair, we can see that the USD/ZAR has faced significant fluctuations in recent times. As of July 2021, the exchange rate stands at $14.32 per ZAR. The following table displays how this currency pair has performed over the past five years.

Year High Low Average
2017 R17.91 R12.31 R13.87
2018 R15.71 R11.87 R14.28
2019 R16.68 R13.26 R14.75
2020 R19.35 R14.64 R17.06
2021 YTD* (as of July) R15.84 R13 R14

Despite its difficulties, there are unique aspects to trading this pair compared to others due to South Africa’s significant status as an emerging market economy on the African continent.

Interestingly, the USD/ZAR was closely linked to apartheid-era sanctions placed on South Africa from around 1970 until the country’s first democratic elections in 1994 when sanctions were lifted gradually by international partners such as US and European companies and nations.

Traders should use caution when trading this forex pair. Broker fees should be watched closely along with swap rates and slippage to ensure that trades are profitable over time despite market fluctuations over time. Trading USD/RUB may cost you a pretty Ruble with high broker fees, devilish swap rates, and sneaky slippage.


The currency pair consisting of the US dollar and the Russian ruble, also referred to as the ‘Greenback-Rouble’, is one of the most challenging Forex pairs to trade.

In analyzing the data for this popular pair, it appears that several factors contribute to its difficulty level. The table below highlights some of these challenges using actual figures:

USD/RUB Factors Value
Pip Value 0.01
Spread 40 pips
Swap Long -123.21
Swap Short -2.02
Average Slippage 16.1 pips
Margin Requirement 10%

From the data above, it is clear that trading USD/RUB comes with unique challenges. Despite having an acceptable pip value and margin requirement ratio (10%), there is a relatively broad spread of 40 pips on average and high negative swap rates (especially on long positions). Furthermore, there is an increasing risk of slippage given an average rate of 16.1 pips experienced during trading.

It might interest traders looking at this currency pair to know that swaps can be advantageous or disadvantageous; therefore, -123.21 for long trades negatively impacts traders’ profits should they hold their positions overnight.

As per a report by Investing.com, the Russian ruble remains one of the most volatile emerging market currencies against developing country peers like Turkish lira, South African rand, Brazilian real among others due to reliance on global oil prices and rising geopolitical tensions leading to sanctions from western countries like America regularly caused unsettling volatility in global markets.

It is advisable for traders interested in trading difficult forex pairs like USD/RUB to understand technical analysis well and keep up-to-date with fundamentals economic information based on world happenings like natural disasters, political uncertainty, and others. Moreover, traders should budget for additional broker fees due to large spread and swaps typical for such pairs and employ sound risk management techniques to protect their capital.

Navigate the stormy waters of difficult forex pairs by arming yourself with technical analysis, fundamental analysis, news awareness, and risk management techniques.

Tips for Trading Difficult Forex Pairs

Tips For Trading Difficult Forex Pairs - What Is The Hardest Forex Pair To Trade?,

Photo Credits: forexbrokerreport.com by Juan Robinson

Trade difficult Forex pairs? Understand technical and fundamental analysis! Keep up with news and events. Utilize risk management techniques. In this section, we will explore these solutions. Price action, support and resistance levels. Central bank policies, news events, market emotions. And risk management–it’s key!

Understanding Technical Analysis

Technical analysis is a critical aspect of successful forex trading. It involves studying historical price action to identify trends and making decisions based on that knowledge. Traders should be familiar with key tools such as support and resistance levels, Fibonacci retracements, Elliott Wave theory, candlestick analysis, chart patterns, technical indicators like moving averages, Bollinger Bands, Relative Strength Index (RSI), Stochastic Oscillator, Commodity Channel Index (CCI), and Average Directional Index (ADX). Understanding technical analysis requires a deep understanding of how these tools work together to give traders insights into market movements.

In addition to these fundamental tools, traders must also be aware of the impact of economic events such as interest rate changes and other financial data releases. Changes in global political events like elections can also influence market behavior. Technical analysis provides traders with the necessary information needed to make informed decisions about entering or exiting positions in difficult forex pairs.

One must keep track of every detail which influences the currency exchange rates for any given asset pairing in an unpredictable manner. These details are not always directly related to one another or to currency fluctuations which can create more nuanced challenges.

For example, a trader might experience difficulty when trading USD/JPY if the yen is strengthening while US interest rates remain stable. In this scenario, the currency pair’s price would shift significantly in one direction without adhering to standard charting patterns or moving average performance metrics. Understanding these nuances comes from constantly learning by analyzing past performance coupled with taking measures to manage risks effectively.

Once I traded AUD/USD based on technical analysis but ignored upcoming major global events’ concerning factors that heavily impacted exchange rates across the board. My trade incurred heavy losses due to my oversight. From then on, I learned how significant news and political events can sway even the most predictable trading scenarios.

Fundamental analysis isn’t rocket science, it’s just reading minds of central bankers and predicting the future – easy peasy.

Using Fundamental Analysis

Fundamental Analysis in Forex Trading

Understanding fundamental analysis is crucial for successful forex trading. This method involves studying economic data and other significant factors that affect a currency’s value, such as central bank policies, interest rates, inflation, unemployment, GDP, trade balance, consumer confidence, export and import data. Geopolitical risk also plays a vital role in determining currency values as certain currencies act as safe havens during uncertain times.

By analyzing this information, traders can generate forecasts about how currencies will perform over the long term. As a result, they can make well-informed decisions on when to enter or exit trades.

To effectively use fundamental analysis in forex trading, stay up-to-date on economic calendars to be aware of upcoming major news events that could impact the markets. Keep an eye out for any divergence between expected and actual data releases which may create opportunities.

Stay informed, but don’t let the news control your trades – it’s all fun and games until market emotions like fear and greed get involved.

Paying Attention to News and Events

Staying informed about current events and news is crucial when trading forex pairs. By monitoring news events, traders can anticipate market volatility and adjust their strategies accordingly. Additionally, news events can cause changes in market sentiment and result in market manipulation that impacts trade psychology. Fear and greed are powerful emotional drivers of market behavior, making it important to stay up-to-date on current news events.

Successful traders use fundamental analysis techniques to analyze the impact of news events on the forex market. This involves understanding how economic data releases, geopolitical developments and other global factors may impact currency valuations. By paying close attention to both scheduled news releases and breaking developments, traders can gain an edge in predicting future price movements. This information can be used to inform decisions about entry and exit points as well as trade sizes.

It’s important to remember that not all news events will have the same impact on currency valuations. Factors such as the size of the economy or geopolitical significance of a country can influence the magnitude of currency reactions.

According to a report by Bloomberg Markets, analysts advise keeping an eye on global political developments that could affect commodities prices such as oil which would indirectly impact currencies linked with mining exports like CAD & AUD.

Ultimately, staying informed about significant news events is one of the key ways to improve your odds of success when trading forex pairs. Trade safely and avoid drowning in losses with the help of risk management techniques like stop loss and take profit.

Utilizing Risk Management Techniques

Managing risks in forex trading is crucial and understanding risk management techniques is imperative. This involves setting stop-loss orders to minimize losses, while also taking profit steps as a way of safeguarding profits. To manage risks effectively, traders must use diverse strategies to protect against market volatility and unpredictability.

One skill traders need to develop for managing risks effectively is utilizing tools like technical analysis. Technical analysis can be an excellent way of identifying entry and exit points that take into consideration the amount of risk involved in a trade.

Another technique to consider is fundamental analysis – this can help predict price movements based on various factors like economic growth indicators, interest rates or inflationary trends. It’s essential to pay attention to news events and releases since changes in GDP, interest rates or other economic data releases can move markets quickly.

Finally, implementing adequate risk management procedures is essential regardless of the currency pair you decide to trade. Traders should establish a solid trading plan that includes stop loss and take-profit orders which help them mitigate potential losses arising from unforeseen market conditions.

A real-life story about how ineffective risk management techniques can lead to major losses for traders would be when China devalued its currency by nearly two percent in August 2015 – leading many speculators shorting the yuan out of their positions with massive losses overnight. This event highlights how crucial it is for traders not only to use effective risk management techniques but also be on watch for unpredictable global events that could impact their trades.

Five Facts About the Hardest Forex Pair to Trade:

  • ✅ The Japanese yen (JPY) is often considered the hardest forex pair to trade due to its high volatility and sensitivity to global market events. (Source: DailyFX)
  • ✅ USD/JPY is one of the world’s most actively traded forex pairs, making it a popular choice for traders despite its difficulty. (Source: Investopedia)
  • ✅ Trading the JPY requires a thorough understanding of Japanese politics, economics, and culture as these factors can greatly impact the currency’s value. (Source: BabyPips)
  • ✅ The JPY is often used as a safe haven currency during times of economic uncertainty, further adding to its unpredictability. (Source: The Balance)
  • ✅ Successful traders of the USD/JPY pair often employ a range of technical and fundamental analysis techniques, as well as a patient and disciplined trading approach. (Source: FXStreet)

FAQs about What Is The Hardest Forex Pair To Trade?

What is the hardest forex pair to trade?

The hardest forex pair to trade is subjective and can vary depending on the trader’s expertise, trading strategy, and risk tolerance. However, some commonly regarded difficult forex pairs include exotic currencies, such as the Thai Baht or the South African Rand, due to their low liquidity and high volatility.

Why are exotic currency pairs more difficult to trade?

Exotic currency pairs are more difficult to trade due to their low liquidity and high volatility. Their low liquidity makes it challenging to find a buyer or seller, while high volatility may lead to sudden and unpredictable price movements. Therefore, traders need to have a thorough understanding of the market and apply risk management techniques.

What should beginners consider before trading difficult forex pairs?

Beginners should consider their knowledge and experience in forex trading before attempting to trade difficult forex pairs. It’s recommended that beginners start with major currency pairs that have higher liquidity and lower volatility. Additionally, traders should research and analyze the market before making any trades and have a solid risk management plan in place.

What are some strategies for trading difficult forex pairs?

Some effective strategies for trading difficult forex pairs include using technical indicators, such as Bollinger Bands and Moving Averages, as well as fundamental analysis to identify potential market trends. Traders can also consider using hedging techniques, such as buying options or trading correlated currency pairs, to mitigate risk.

Which other factors should traders consider when trading difficult forex pairs?

Apart from high volatility and low liquidity, traders should also consider other factors when trading difficult forex pairs, such as geopolitical events, economic news announcements, and market sentiment. Additionally, traders should have a solid understanding of the currency’s country and its economic policies, as these can impact the currency’s value.

Is it possible to profit from trading difficult forex pairs?

Yes, it is possible to profit from trading difficult forex pairs. However, it requires a thorough understanding of the market, effective risk management techniques, and a well-executed trading strategy. Traders should also be aware of the potential risks involved and be prepared to adapt to market changes.

Phoebe Hall

I started investing and got involved with the money markets around 2019. This isn't a full time job for me, more so a hobby and an industry I'm incredibly passionate about. Alongside speculating within the markets, I write content financial blogs in the industry.

Recent Content