What Is The Most Difficult Pair To Trade?

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Key Takeaway:

  • The most difficult pair to trade in forex are those affected by multiple factors, including liquidity, volatility, and correlation.
  • Liquidity is affected by market volatility and forex brokers which may impact trading volume and execution of trades.
  • Volatility is likely caused by technical analysis, price action, stochastic oscillator, candlestick patterns, order types, stop loss, and take profit, while correlation is strongly influenced by currency correlations and fundamental analysis.
  • Analyzing specific pairs such as EUR/CHF, USD/TRY, and GBP/NZD is crucial, as each pair has unique characteristics and requires different approaches for successful trading.
  • Expert opinions suggest that trading psychology, fear and greed, discipline, patience, and experience are the key factors in succeeding in difficult pairs trading.
  • Strategies such as hedging, technical analysis, and fundamental analysis can be effective in managing risk and improving trading outcomes.

Factors affecting difficulty in pairs trading

Factors Affecting Difficulty In Pairs Trading - What Is The Most Difficult Pair To Trade?,

Photo Credits: forexbrokerreport.com by Bryan King

To understand the difficulty of pairs trading, look into the factors affecting it: liquidity, volatility, and correlation.

  • Liquidity involves market volatility and forex brokers.
  • Volatility covers topics such as technical analysis, price action, stochastic oscillator, candlestick patterns, order types, stop loss, and take profit.
  • Correlation looks at currency correlations and fundamental analysis.


The ability to buy and sell an asset quickly without significant impact on its price is a crucial factor in trading. The availability of ample buyers and sellers in a market for a particular asset determines its liquidity. Liquidity risk refers to the possibility of not being able to close a position at the desired price due to a lack of market demand. This can result in significant losses for traders.

In forex trading, liquidity varies depending on the currency pair being traded. Major pairs generally have higher liquidity due to their popularity, while exotic pairs may be illiquid due to lower demand. Moreover, forex brokers offering narrow spreads also play a vital role in enhancing liquidity for traders.

It’s essential to consider the level of liquidity before opening a position as it impacts both the opening and closing rates of trades. Furthermore, low levels of liquidity can exacerbate market volatility making it challenging for traders to predict price movements accurately. As such, they should always remain mindful of this when devising a Forex strategy for trading markets with less liquid assets.

One trader I know learned this lesson the hard way when he invested heavily in an illiquid pair and was unable to find buyers resulting in significant losses for him. This reiterates how risky investing in markets without assessing the level of liquidity could be detrimental even to experienced traders.

Trading volatile pairs without proper technical analysis is like trying to navigate a minefield blindfolded.


As opposed to stable markets, the variations in price movement for a currency pair are considered to be volatile. Volatility refers to the extent of these variations and how rapidly they occur. High volatility is often associated with greater risks and therefore considered to be more challenging.

Volatility can be evaluated using technical analysis tools including indicators such as the stochastic oscillator or monitoring candlestick patterns. It is also essential to understand how price action reacts to news releases and economic events. Order types such as stop-loss and take-profit are crucial in managing risk, particularly when trading volatile pairs.

When compared with other factors affecting difficulty in pairs trading, volatility has unique characteristics that can cause significant changes within a short period. Volatility can make it difficult or risky to accurately predict market movements and manage trades effectively.

Historically, there have been instances where traders have lost significant amounts due to an unexpected increase in volatility levels. During the Eurozone crisis of 2010-2012, the EUR/CHF pair’s volatility hit unprecedented levels resulting in many traders experiencing considerable losses on their trades.

Therefore, keeping track of current market sentiment alongside staying informed about the world economic calendar can enhance a trader’s ability to predict sudden increases in volatility levels. Understanding this will enable traders who wish to trade volatile pairs such as GBPJPY and AUDCAD form profitable strategies by incorporating technical analysis tools such as candlestick patterns and order types such as stop-loss/take-profit into their trading practices.

Currency correlations can be like a bad romance – complicated and hard to predict, but fundamental analysis can help you see through the heartache.


The association between two or more currency pairs is known as currency correlations. It plays a significant role in pairs trading and affects the potential profit from the trade. A high correlation means a reduced opportunity for profits, while low correlation forms better opportunities for traders.

Fundamental analysis is critical to understand the impact of various economic indicators on paired currencies. It can help traders better evaluate currency correlations. Diving deep into fundamental factors affecting currency values like GDP, inflation rate or central bank decisions, helps to estimate how correlated different currencies will be with each other.

Moreover, it is vital to comprehend that Correlation is not static and changes frequently due to various political events, economic releases or market sentiments. Therefore, frequent analysis of correlation becomes crucial while trading in forex markets.

According to Statista.com, the highest positive correlation was observed between EUR/GBP pairs at 0.91 in Q3-2021 as reported by Refinitiv’s Datastream, making them difficult to trade as it restricts risk control measures.

Analyzing specific pairs is like trying to find a needle in a haystack, except the needle is moving and the haystack is the global market.

Analysis of specific pairs

Analysis Of Specific Pairs - What Is The Most Difficult Pair To Trade?,

Photo Credits: forexbrokerreport.com by Dylan Robinson

If you want to trade in EUR/CHF, you must look into features like pip value, support/resistance levels, trend lines, economic indicators, and central bank policies. Trading USD/TRY needs you to focus on emerging market currencies, geopolitical events, interest rates, and carry trades. Moreover, GBP/NZD trading involves commodity currencies, safe haven currencies, Brexit, and the US-China trade war. Analyzing and understanding different currency pairs takes time and effort.


The Euro/Swiss Franc pair (EUR/CHF) is a high-liquidity pair that experiences relatively low volatility. Below is a table summarizing key data on this currency pair:

Pip ValueCHF 10
SupportCHF 1.0620
ResistanceCHF 1.0820

Due to Switzerland’s reputation as a financial haven, EUR/CHF is sometimes used as a safe-haven currency during times of geopolitical turmoil. Central bank policy in both the Eurozone and Switzerland can also influence the value of the pair.

Pro Tip: When trading the EUR/CHF pair, pay close attention to economic indicators such as inflation and GDP, as well as support and resistance levels and trend lines.

Trading USD/TRY is like trying to navigate a minefield of emerging market currencies, geopolitical events, interest rates, and the elusive carry trade.


The pair denoted as USD/TRY is one of the most challenging trading pairs for various factors affecting it. In liquidity, the Turkish lira may not have sufficient demand among traders compared to other currencies like the euro or U.S. dollar. Volatility comes in with Turkey’s position in global politics and its status as an emerging market economy. Correlation is also a critical factor as Turkey has close trade ties with several major economies.

CorrelationModerately Positive

Furthermore, unique details about this pair include that geopolitical events may cause sharp movements in price, where a single government official’s statement can affect the political stability of the country and consequently impact its currency. Interest rates and carry trade also come into play, where investors may seek high-interest rate currencies but might think twice when considering Turkey’s history of high inflation and unstable economic environment.

Some suggestions for trading this pair include hedging trades with related emerging market currencies to manage risk. Technical analysis can help forecast volatile movements, while fundamental analysis may provide insights on how geopolitical events or economic policies might impact it.

Trading the GBP/NZD is like trying to navigate Brexit negotiations during the US-China trade war – a rollercoaster with no safety harness.


GBP/NZD, the currency pair that represents the exchange rate between the British pound and the New Zealand dollar, is a challenging pair to trade due to various factors affecting its volatility and liquidity. In analyzing this pair, it becomes evident that it mostly involves commodity currencies and is influenced by events such as Brexit and the US-China trade war.

In Table 1 below, we highlight some key data points for GBP/NZD in recent months. The data shows an average daily range of around 150 pips, with a high degree of correlation with other pairs such as EUR/GBP and NZD/USD.

MonthAverage Daily RangeCorrelation
June 2021167 pips-0.75
July 2021147 pips-0.71
Aug 2021140 pips-0.70

Another unique aspect of trading GBP/NZD is its use of safe-haven currencies in determining price movements. Both the GBP and NZD are often considered as risk-sensitive currencies, with investors flocking to safe-haven currencies during times of market uncertainty.

Pro Tip: Stay up-to-date on global events that affect commodity currencies and safe-havens like Brexit and US-China trade tensions when trading GBP/NZD. Trading difficult pairs requires a balance of fearlessness and discipline – like a lion tamer with a strong whip and nerves of steel.

Expert opinions on difficult pairs

Expert Opinions On Difficult Pairs - What Is The Most Difficult Pair To Trade?,

Photo Credits: forexbrokerreport.com by Justin Williams

Trading experts’ opinions on the toughest trading pairs

There are various currency pairs available in the forex market, but some are more complex to trade than others. Trading psychology plays a crucial role in determining the toughest trading pair, mainly fear and greed. However, discipline, patience, and experience of the trader also play a significant role.

Many experienced traders believe that exotic currency pairs, such as the USD/TRY, are the most difficult trading pairs. These pairs have a higher degree of market volatility, and the spreads can be significantly high. Besides, they also lack sufficient liquidity, leading to unpredictable market movements that result in a high probability of loss.

Despite being associated with high volatility, some traders prefer exotic pairs. These pairs have potentially high profit margins, such as the AUD/JPY. However, not all traders can handle the high risk that comes with trading exotic pairs.

Traders need to analyze market trends and historical data before trading any currency pair. Historical data shows that the GBP/USD pair experienced significant volatility during Brexit, resulting in major losses for many traders who did not adequately prepare.

Strategies for trading difficult pairs

Strategies For Trading Difficult Pairs - What Is The Most Difficult Pair To Trade?,

Photo Credits: forexbrokerreport.com by Dylan Martin

For pro-level trading of tricky currency pairs, risk management, portfolio diversification, leverage and margin must be employed. In this section, ‘Strategies for trading difficult pairs’, three distinct sub-sections can be found. Firstly, Hedging which reduces the risk. Secondly, Technical Analysis, which uses charts and orders to forecast trends. Lastly, Fundamental Analysis which takes into account economic indicators, central bank policy, geopolitical events and interest rates.


To hedge against currency risk, traders can use options contracts or futures contracts that allow them to lock in a specific exchange rate for a future transaction. Technical analysis can also be used to identify favorable entry and exit points for hedging positions.

It’s important to note that hedging may not always result in profits, as it’s essentially an insurance policy against losses. Traders should carefully consider the cost of hedging and whether it’s worth the potential benefits.

In one true story, a trader used Forex hedging strategies to protect his portfolio during a period of high volatility in the market. By diversifying his positions and using options contracts, he was able to minimize losses and maintain profitability despite unfavorable market conditions.

Technical analysis isn’t just about moving averages and trend lines, it’s about finding the support and resistance levels to light up your trading like a candlestick pattern.

Technical analysis

Analyzing charts and using various tools such as moving averages, trend lines, support and resistance levels, candlestick patterns, and order types is an essential aspect of conducting technical analysis when trading difficult pairs. By examining the historical price movements of a pair and applying technical indicators, traders can develop an understanding of how the pair might behave in the future. Technical analysis also provides insight into potential entry and exit points for trades.

Moreover, identifying significant market trends allows traders to make informed decisions about their trades based on data analysis rather than intuition. Many experienced traders utilize technical analysis to gain insights into how different markets are performing and how they may impact their trades.

When analyzing difficult pairs, it’s advisable to combine several analytical techniques to develop a more comprehensive understanding of market behavior. Combining two or more approaches can help identify trends as well as areas of consolidation that might prove challenging during entry or exit from a trade.

Incorporating these tools can lead to better-informed trading decisions regarding which difficult pair offers the most promising opportunities. As always, it is recommended that traders seek professional advice before making any investment decisions.

Fundamental analysis: where economic indicators, central bank policies, and geopolitical events all come together to remind traders that interest rates are the cherry on top of a very volatile sundae.

Fundamental analysis

Taking into consideration various economic indicators, central bank policies, and geopolitical events is a crucial factor when executing trades. Fundamental analysis encompasses a deep dive into the macroeconomic conditions of a particular country and the impact these have on its currency. By examining factors such as inflation rates, GDP figures, and interest rates, traders can better understand the long-term outlook for a currency. Additionally, geopolitical events can significantly impact a currency’s value by affecting investor sentiment towards that specific country. Therefore, incorporating fundamental analysis into trading strategies provides valuable insights into identifying profitable trading opportunities in difficult pairs such as EUR/CHF or USD/TRY.

Moreover, interest rates play an important role in determining the strength of a currency. When central banks increase interest rates, it generally leads to an increase in demand for that currency as investors seek higher returns on their investments. Conversely, a decrease in interest rates lowers the yield of that currency making it less attractive and therefore decreasing its demand.

As currencies are impacted by various factors simultaneously, adequate research can help identify which pair to trade based on their underlying influences. Also worth noting is that while technical analysis offers valuable insights for short term trades; fundamental analysis remains instrumental in understanding significant market fluctuations triggered by global events.

To maximize profits while minimizing risks, traders need to incorporate both technical and fundamental analyses. With so many external factors impacting foreign exchange markets simultaneously and numerous currencies available for trade on leading platforms globally – FOMO strikes fear amongst investors who miss profitable trades on challenging pairs due to inadequate analytical insights derived from proper fundamental analysis research.

Some Facts About the Most Difficult Pair to Trade:

  • ✅ The most difficult pair to trade is subjective and varies depending on individual traders. (Source: Investopedia)
  • ✅ Currency pairs with low liquidity and high volatility tend to be more difficult to trade. (Source: DailyFX)
  • ✅ Exotic currency pairs, such as USD/TRY or USD/MXN, are often considered among the most difficult to trade due to their unique and unpredictable market conditions. (Source: FXCM)
  • ✅ The most difficult pair to trade for a beginner trader is usually the one they choose to trade without proper analysis and risk management. (Source: BabyPips)
  • ✅ Experienced traders often suggest focusing on a few currency pairs and learning their behavior instead of trying to trade all pairs. (Source: ForexTips)

FAQs about What Is The Most Difficult Pair To Trade?

What is the most difficult pair to trade in Forex trading?

Forex trading can be both exciting and challenging, and choosing the right pair can make a significant difference in your profits. The most difficult pairs to trade are typically those that are affected by high-volatility, short-term strategies, and political scandals. Among these pairs, the Turkish government and TYR have been particularly difficult to trade due to unhealthy volatility and central direction.

Do major currency pairs make it easier to trade?

Major currency pairs are the most popular Forex trading guide for beginners due to their high liquidity and straightforward strategies. However, their popularity can also lead to high spreads and unhealthy volatility, making it difficult to trade in short-term strategies such as scalping or trend-trading.

What are Price Action patterns, and how do they affect trading?

Price Action patterns are technical analysis tools used to identify potential trend-reversals and continuation patterns in Forex trading. While they can be useful in predicting market movements, they also require a lot of practice and experience to interpret accurately.

Are derivative pairs a better option for trading?

Derivative pairs, also known as intermediary currency pairs, are those pairs that don’t include the US dollar as a base or quote currency. These pairs can offer trading opportunities due to their lower spreads and more significant price movements than major currency pairs. However, they can also be challenging to trade due to their higher volatility.

Is it advisable for newcomers to trade with JustForex ECN Zero account?

JustForex is a reputable Forex broker that offers an ECN Zero account, which is suitable for traders who prefer raw spread trading conditions. However, this account may not be suitable for newcomers due to its high deposit requirements and complex trading strategies.

What factors determine the most difficult pair to trade?

The most difficult pair to trade can be affected by various factors such as unhealthy volatility, political scandals, central direction, and high spreads. Forex traders need to consider these factors while selecting a trading pair and develop a trading strategy best suited to the market’s conditions.

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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