What are the Most Volatile Currency Pairs and How to Trade Them?

The most volatile currency pairs are those with high volatility. If you want to make large profits quickly and steadily, you will choose a low-volatility currency pair. However, if you want to earn money slowly and steadily, you should consider investing in a high-volatility currency pair. The reason for the higher volatility is the availability of large trader groups. The more traders there are, the riskier the pair becomes.

Although trading the most volatile currency pairs can be risky, if you manage your risks well, you can make a good profit. Choosing a less volatile pair is a good way to diversify your portfolio. Most forex beginners stick to the major currency pairs, but it’s worth trying to diversify your portfolio with a more exotic pair. This will allow you to profit more if you trade it regularly.

The most volatile currency pairs offer the most profitable opportunities. However, their prices can be very unpredictable. Traders should analyze the political conditions of the country issuing the currencies. Recent elections in Brazil have harmed the country’s economy, making it a hotbed for scalpers. It’s important to know what drives the market before trading. A rising US dollar will push up the price of gold, while a falling Australian dollar will lower the value of the real.

The currency pairs which are most volatile are:

  • AUD/JPY (Australian Dollar/Japanese Yen)
  • NZD/JPY (New Zealand Dollar/Japanese Yen)
  • AUD/USD (Australian Dollar/US Dollar)
  • CAD/JPY (Canadian Dollar/Japanese Yen)
  • AUD/GBP (Australian Dollar/Pound Streling)

Trading the Most Volatile Currency Pairs

Trading the Most Volatile Currency Pairs

When trading in foreign exchange, one of the first things you should do is learn how to trade the volatile currency pairs. The most volatile currency pairs are more likely to experience extreme price movements, and they have a higher risk. This means that you should only use these pairs if you have the experience to manage them. While the less volatile pairs also have risk, these ones are a great place to start if you’re new to the market.

When trading in these currency pairs, the trend is crucial to your success. Although volatility can disrupt your trades, the trend will usually outlast the ups and downs of the market. This is because the overall trend will outlast the volatility, and you’ll be able to trade with the trend. By using conventional chart patterns such as Bollinger Bands, Donchian Channels, and Average Directional Index, you can easily recognize spikes in the trend.

Another way to identify the volatile currency pairs is to study the characteristics of the currencies. The US Dollar is the most volatile currency, with a daily turnover of $5 trillion. The Canadian Dollar is the safest currency in the world but is also affected by oil prices. A high volatility currency pair can be a good investment, but it can also lead to greater losses. You should also know what factors affect the price of a currency pair.

If you are looking for further guidance on the same, reach to NLVX, and let our experts help you!!

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