In
general, the eight most traded currencies are used and these pairs are
the U.S. dollar (USD), the Canadian dollar (CAD), the euro (EURO),
the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar
(NZD), the Australian dollar (AUD) and the Japanese yen (JPY).
Currencies
must be traded in pairs. Mathematically, there are 27 different
Currency Pairs that can be derived from those eight currencies alone.
However, there are about 18 currency pairs that are conventionally
quoted by forex market makers as a result of their overall liquidity.
Major Currencies
The
total amount of currency trading involving these 18 pairs
represents the majority of the trading volume in the FX market.
This manageable number of choices makes trading a lot less
complicated compared to dealing with equities, which has thousands of
possible choices to choose from.
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