What Is The Hardest Forex Pair To Trade?

What is the hardest forex pair to trade?,

Key Takeaways:

  • Trading the forex market can be challenging, and some currency pairs are more difficult to trade than others due to factors such as volatility, liquidity, and spread.
  • The top five hardest forex pairs to trade are EUR/USD, USD/JPY, GBP/USD, USD/TRY, and NZD/USD.
  • To effectively trade difficult forex pairs, traders should utilize technical and fundamental analysis, practice proper risk management, and stay up-to-date on market trends and news.

Hardest Forex Pairs to Trade

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

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To uncover solutions for trading the toughest forex pairs, investigate the section on hardest forex pairs. It has two subsections:

  1. Definition of Forex Market
  2. Significance of Forex Trading Pairs

These subsections cover topics such as forex strategies, currency pairs, forex market analysis, common and exotic forex pairs, currency correlation, technical and fundamental analysis, plus risk management in forex.

Definition of Forex Market

The Forex Market refers to the global currency trading, where currencies are traded in pairs. It entails buying one currency while simultaneously selling another currency. The goal is to make a profit from the exchange rate fluctuations between two currencies. Forex trading involves participating in the world’s largest financial market, with an average daily trading volume of $6.6 trillion.

To engage in forex trading, traders need to select a pair of currencies and analyze their market trends using various methodologies like technical and fundamental analysis. Popular forex pairs include EUR/USD, USD/JPY, GBP/USD, etc., while exotic forex pairs like USD/CNY or USD/ZAR involve less popular currencies.

Forex market analysis involves studying various factors affecting currency prices, including economic and geopolitical events across different countries. Depending on your analysis strategies, you can choose volatile or stable currency pairs that allow you to make steady profits or high-risk/high-reward trades.

Currency correlation is essential when selecting forex pairs since some pairs tend to have a positive correlation, meaning they move together, while others correlate negatively or behave randomly. This correlation affects your profitability by changing the way you position your trades.

In summary, the Forex Market provides diverse opportunities for traders who understand these concepts and leverage their analytical skills to trade the right forex pairs at the right time. Consequently, one needs to be well-versed with these fundamentals when deciding whether to trade difficult foreign exchange rates such as EUR/USD, USD/JPY, GBP/USD, USD/TRY and NZD/USD through technical analysis or fundamental analysis and proper risk management techniques accordingly.

Trading forex pairs is like choosing between a wedding cake and a cupcake – major pairs are the grandeur and minor pairs are the sweetness, but both require technical and fundamental analysis.

The Significance of Forex Trading Pairs

Forex trading pairs are significant to understand the market and its trends better. Traders can analyze currency fluctuations effectively to identify profitable trades. Trading major forex pairs such as EUR/USD, USD/JPY, and GBP/USD are common strategies for beginners since they have high liquidity and low spreads compared to minor forex pairs. Minor forex pairs such as USD/TRY and NZD/USD require in-depth research on the country’s economy and political climate to predict their movements accurately. A keen understanding of technical analysis in forex can help traders interpret price movements better, whereas fundamental analysis in forex enables traders to anticipate economic and political developments that could affect currency exchange rates.

To trade difficult forex pairs successfully, traders must consider various factors like volatility, liquidity, and spread. High volatility can cause sudden price movements that may lead to losses if not managed adequately through effective risk management techniques. Also, highly illiquid forex pairs may result in unstable prices that could make it difficult to execute trades profitably. Large spreads on minor forex pairs also add extra costs when entering trades. Consequently, traders will need a solid approach when dealing with the hardest currency trading pairs.

For instance, using a combination of technical analysis and fundamental analysis can help you anticipate market forces’ effects better while mitigating risks with proper risk management techniques. Successful traders often use multiple tools, including moving averages, support levels, chart patterns like triangles or wedges and candles alongside news releases like changes in world events or policies announced by central banks.

One trader once shared his experience: He traded the USD/CAD pair during Canada’s employment data release but failed to realize that Canada also released key inflation data at the same time which led him into undesirable positions. Thus he learned always to keep an eye on market news before opening mindless trades; technicals aren’t enough without a fundamental perspective shaping decisions-making processes consistently across all aspects of trading strategies in the Forex Market.

Forex pair trading can be as unpredictable as the weather, but with the right strategies and knowledge of the influencing factors, even the most difficult pairs can be tamed.

Factors Influencing the Difficulty of Forex Pair Trading

Factors Influencing The Difficulty Of Forex Pair Trading - What Is The Hardest Forex Pair To Trade?,

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To grasp the difficulty of trading forex pairs, you need to be aware of the various factors which influence it. We’ll explore the role of forex trends, currency strength, forex systems, and broker selection. Plus, we’ll briefly introduce sub-sections like volatility, liquidity, and spread which give traders more insight into vital forex trading elements.


The volatility of a forex pair is influenced by various factors such as economic events, political climate, natural disasters and currency manipulation, which can greatly impact its value. Forex traders make use of indicators to identify forex market cycles and take advantage of fluctuations in exchange rates. Trading sessions also influence volatility with some overlapping periods offering higher liquidity while others offer lower volume.

One way to gauge if a currency pair is volatile or not is by analyzing forex market graphs and charts that indicate price movements during different currency pairs’ market hours. Besides, spreads and forex trading signals also play an essential role in identifying potential opportunities for profitable trades.

It’s important to note that while high volatility can provide substantial returns on investment, it also increases the risks associated with trading that particular currency pair. Therefore, traders must employ effective risk management techniques such as stop-loss orders, setting limits on positions size, diversifying portfolio holdings through forex arbitrage strategies which are aimed at reducing exposure to significant losses caused due to sudden price changes.

A helpful strategy for traders dealing with volatile pairs could be technical analysis based on historical price trends and patterns. Fundamental analysis provides further insight into economic conditions impacting prices and sentiments, forming a basis for long-term investment decisions.

Without liquidity, even the best Forex trading robots are just expensive paperweights.


The ease of converting an asset into cash without a significant price impact defines the liquidity of a particular financial asset. In the forex market, liquidity refers to the ability of traders to buy and sell a currency pair at any time without causing significant price changes. Thus, a highly liquid currency pair offers traders easy entry and exit points, low transaction costs, and reduced slippage when executing trades.

Liquidity in forex trading has direct implications on the volatility and spread of currency pairs. Trading unleveraged or using moderate leverage can be easier with highly liquid pairs that allow for quick execution at market prices. On the other hand, low-liquidity currency pairs prompt traders to trade with caution due to scarce trading opportunities that may expose them to high spreads or quiet markets.

It’s essential to note that liquidity can vary depending on market sessions, economic events, and political developments affecting currencies’ exchange rates. As such, both novice traders and experienced traders need to stay informed about major economic news releases that induce volatility in financial markets.

Despite being a crucial factor for successful forex trading, liquidity is not the only consideration when choosing which currency pairs to trade. Other factors such as technical analysis tools used, risk appetite level, and overall trading strategies also come into play.

An example of how lack of liquidity affects forex trading was during the Swiss franc crisis in January 2015 caused by lifting the franc’s peg against the euro by Swiss National Bank (SNB). Several retail brokers were significantly impacted by negative client balances forcing some out of business since they lacked adequate reserves to cover losses incurred on their clients’ accounts resulting from massive price gaps

In summary, those looking for Forex trading education have access to several resources including;

  • Forex Trading books
  • Forex Trading platforms websites/blogs
  • Forex Trading robots/tools/forums/discussions with experts & peers
  • Forex Trading Software (Technical Indicators/Expert Advisors/EAs)
  • Trading Strategies for Novice & Experienced Traders
  • Trading Psychology (Emotional Intelligence)
  • Forex Analysis Tools/News providers such as Bloomberg Terminal.

Mastering the art of spread analysis can give traders an edge in deciphering market trends and executing profitable trading strategies.


The impact of spread cannot be underestimated in forex trading. The difference between the bid and ask prices of a currency pair is referred to as ‘Spread.’ It represents the cost incurred by traders when entering or exiting a trade. Spread can play a significant role in deciding the profitability of trades, especially for high-frequency traders who aim to make a small profit on each trade.

A wider spread means more significant costs, which hurts scalping strategies that depend on tight entry and exit points. Thus, it’s advisable to watch out for trading charts showing forex price charts and doing forex graphical analysis while implementing breakout strategies based on market trends, sentiment analysis as well as swing trading strategies with accurate entry & exit points.

Trading difficult currency pairs means dealing with higher spreads that increase the overall cost of trading. However, wiser traders always brace themselves against uncertainties by looking up forex price history closely recorded using pricing data from exchange servers. Apart from watching resistance levels, support levels; using fibonacci trading techniques, pivot points as well as trading oscillators are also some popular tactics used to better judge suitable trades while maintaining risk management strategies effectively.

Fun Fact: When an investor invests $1 million in Forex Trading without leverage (i.e., 1:1 leveraging ratio), it’s equivalent to holding $50K in a savings account return rate at 2% per annum(Source: Investopedia). Trading the hardest Forex pairs is like playing a game of Russian roulette with your wallet.

Five Hardest Forex Pairs to Trade

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

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Trading on the Forex market is challenging. But trading the hardest Forex pairs? That’s a daunting task! To help, this article provides a solution. It’s split into five sections:

  1. EUR/USD
  2. USD/JPY
  3. GBP/USD
  4. USD/TRY
  5. NZD/USD

Learn how to effectively trade Forex pairs amid market trends and patterns. Use trading indicators, Fibonacci retracements, trends, momentum, and option trading. Keep trading fees and commissions in mind!


The currency pair comprising of the euro and the US dollar, EUR/USD, is considered one of the most actively traded in the forex market due to its high liquidity. However, it can also be challenging to predict due to its sensitivity to global market events and news.

EUR/USD movements are heavily influenced by monetary policy decisions made by both the European Central Bank (ECB) and the Federal Reserve Bank in the United States. It’s also impacted by factors like political instability in Europe, economic data releases, and changes in commodity prices.

One unique aspect of trading EUR/USD is that it’s a popular choice for carry traders, who borrow funds with lower interest rates to invest in higher-yielding currencies. This dynamic can affect the pair’s volatility and make it more challenging to trade.

Pro Tip: Keep an eye on fundamental announcements such as retail sales data or interest rate decisions from both countries’ central banks when trading EUR/USD. Also, utilize technical analysis tools like trend lines or moving averages for better decision-making.

Trading USD/JPY can be a rollercoaster ride – just hold on tight and hope for the best.


The currency pair, commonly referred to as the Dollar/Yen, holds a significant position in Forex trading. The USD/JPY pair is known for its high volume and active trading time during the Asian market.

FactorUSD/JPY’s Impact
VolatilityThe Japanese Yen’s tendency to fluctuate greatly due to economic uncertainty and political instability impacts the USD/JPY’s volatility levels.
LiquidityThe high volume of trade activities during the Asian market provides more liquidity for the USD/JPY pair.
SpreadThe spread for the USD/JPY pair can vary significantly depending on market conditions, leading to increased costs for traders.

Additionally, the Bank of Japan and US Federal Reserve policies have a massive impact on this currency pair’s price movements. Traders must keep a close eye on any news or announcements made by these central banks regarding interest rate changes, monetary policies or geopolitical events causing fluctuation in prices.

Pro Tip: Experienced traders always recommend keeping a flexible approach when trading highly volatile pairs like USD/JPY as unpredictability is inevitable.

Why trade GBP/USD when you can just watch a soap opera for the same level of drama?


VolatilityThe currency pair observes high volatility due to significant economic events affecting both countries.
LiquidityThe high demand for GBP/USD ensures relatively high market liquidity.
SpreadThe spread between bids and asks for GBP/USD is considered wide due to market volatility.

Moreover, political uncertainties, geopolitical tensions, Brexit outcome, BoE monetary policy changes hugely impact the price movements of this currency pair. With a long-term uptrend outlook, it is best traded with cautious risk management strategies.

In 1992, Geroge Soros earned his reputation after successfully shorting the Pound Sterling during Black Wednesday incident when Britain was forced out of the ERM. As a result, Soros’ fund profited over a billion dollars making him known as ‘The man who broke the Bank of England‘. This event showcased how volatile UK’s currency can be and how experienced traders can capitalize on such market scenarios in an instant.

Trading USD/TRY is like trying to catch a falling knife in a tornado.


The forex pair US dollar vs Turkish lira(USD/TRY) is a challenging one for traders due to various factors influencing its volatility. The pairing represents the exchange rate between the US dollar, which is considered the global reserve currency, and the relatively volatile Turkish lira, which tends to be more sensitive to political and economic instability in Turkey.

Historically, Turkey has been prone to political tension and market uncertainty, with a track record of high inflation rates and market volatility. These conditions have contributed to an environment of high risk for traders dealing in USD/TRY.

Even though it remains one of the most actively traded pairs involving emerging market currencies, volatility in the TRY seesawed from steep falls in value to occasional sharp reversals. This unpredictability challenges traders who must stay alert throughout the trading day because subtle changes can affect prices.

Pro Tip: To minimize risk exposure while trading USD/TRY, consider implementing tighter stop-loss orders, reduce position sizing or even skip some trades that appear too risky to undertake.

Why trade a pair that’s harder to read than a Dr. Seuss book? Enter NZD/USD.


This forex pair, denoting the New Zealand dollar and US dollar, is challenging to trade due to various factors. The high degree of volatility in NZD/USD leads to frequent price swings. Moreover, it is less liquid than some other pairs, which impacts trading volume and spreads. Despite its challenges, NZD/USD can offer lucrative opportunities for experienced traders utilizing technical analysis and risk management strategies.

Pro Tip: Considering geopolitical events that might influence NZD/USD could help traders make informed decisions.

Trading difficult forex pairs is like trying to find a needle in a haystack – but with the right strategies and guidance, it’s possible to turn that needle into profit.

Strategies to Trade Difficult Forex Pairs

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

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Gain profitable returns when trading complex forex pairs! Equip yourself with the right strategies. The forex market offers helpful tools and resources – explore some of the best strategies here.

Benefits of forex market signals, news, and community interaction are worth noting. Technical analysis, fundamental analysis, risk management, and intermarket analysis prove useful for trading hard forex pairs. Trading trends, breakouts, and market momentum – get insights here.

Technical Analysis

A skilled trader who uses Technical Analysis can accurately forecast the next move in currency markets accurately. Incorporating fundamental data into their Technical Analysis workflows gives a more accurate picture of how specific companies manage when faced with various macroeconomic conditions. Successful traders combine both Technical Analysis techniques with fundamental perspectives to make informed decisions that gain them an edge in today’s competitive markets.

Pro Tip: Trading on short-term price changes may reduce your position’s overall risk profile but still create good returns on investment, helping traders optimize their profits by identifying optimal entry and exit points.

Peeling back the layers of market news and economic data is the key to unlocking successful trades with fundamental analysis.

Fundamental Analysis

By keeping a close watch on fundamental factors that drive currency values, traders can make informed decisions on when to enter and exit trades. This type of analysis requires in-depth research and knowledge of global current events.

Traders who use fundamental analysis prefer long-term trading strategies and often ignore short-term fluctuations that are caused by technical indicators. They rely on macroeconomic data to make informed decisions.

To use fundamental analysis effectively, traders must keep an eye out for news releases announcing significant economic or political developments and adjust their positions accordingly. Additionally, traders can use tools such as economic calendars to stay updated on upcoming events that could impact currency prices.

Overall, combining both technical and fundamental analyses provides traders with a more comprehensive understanding of the forex market.

Risk management is like wearing a seatbelt in a car, you hope you won’t need it, but it’s better to be safe than sorry.

Risk Management

Proper risk management is vital when trading difficult forex pairs. Traders must develop a comprehensive understanding of the market movements and use analytical tools to predict price fluctuations during trades. One effective risk management strategy involves setting stop-loss orders to minimize potential losses from adverse price movements. Additionally, traders can rely on advanced risk calculation techniques, such as position sizing and diversification, to reduce their exposure across multiple currency pairs. By implementing these strategies, traders can mitigate risks and improve their chances of achieving successful trades.

Five Facts About the Hardest Forex Pair to Trade:

  • ✅ The GBP/JPY is considered to be the hardest forex pair to trade due to its high volatility and unpredictability. (Source: Investopedia)
  • ✅ The GBP/JPY is nicknamed the “Beast” due to its tendency for large price movements and sharp reversals. (Source: BabyPips)
  • ✅ The GBP/JPY is heavily influenced by economic and political factors in both the UK and Japan, making it a challenging pair to predict. (Source: DailyFX)
  • ✅ Successful trading of the GBP/JPY requires careful risk management and a deep understanding of market trends and news events. (Source: Forex School Online)
  • ✅ Despite its difficulty, some traders prefer to trade the GBP/JPY for the potential high returns it offers. (Source: FXCM)

FAQs about What Is The Hardest Forex Pair To Trade?

What is the hardest forex pair to trade?

The answer to this question varies depending on the trader’s experience and personal preferences. However, generally, exotic currency pairs that involve less popular currencies are considered to be the hardest forex pairs to trade.

Why are exotic currency pairs harder to trade?

Exotic currency pairs tend to have lower trading volumes and are less liquid than major currency pairs. This means that there can be wider spreads and more volatile price movements, making it harder to predict market trends accurately.

What are some examples of exotic currency pairs?

Exotic currency pairs include combinations such as USD/TRY (U.S. Dollar/Turkish Lira), USD/ZAR (U.S. Dollar/South African Rand), and EUR/HUF (Euro/Hungarian Forint).

Should beginners avoid trading exotic currency pairs?

As a general rule, beginners should avoid trading exotic currency pairs due to their increased complexity and volatility. It is better to focus on major currency pairs until they have gained more experience and knowledge of the market.

Can experienced traders make profits trading exotic currency pairs?

Yes, experienced traders can make profits trading exotic currency pairs. However, they require a deep understanding of the currency markets and their associated risks. They also need to be able to read and analyze market trends accurately to make informed trading decisions.

What should traders consider before trading exotic currency pairs?

Traders should consider the risks associated with trading exotic currency pairs, including their low liquidity and high volatility. They should also be aware of any political or economic developments that could affect the currency’s value and carefully monitor market trends before entering a trade.

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.

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