Currency trading is one of the most easily understandable assets in the binary options market. This asset has gained immense popularity due to the predictable volatility of the one currency against the other. In the past, only central banks, hedge fund companies and rich individuals had the required capital to trade with currencies. But with the evolution of binary options, even novice traders can buy (call) or sell (put) with a few mouse clicks for as low as $5-$10 per trade.
Each binary options trade with currencies consists of two transactions which involves the purchase of currency against the sale of another. This is why currencies on any binary options platform are traded in pairs against each other. For e.g. if you select the EUR/USD pair and your prediction is that EUR will go up and USD will go down , then you will select the Above(call) position and if you feel EUR will go down against the USD then you select the Below (put ) position.
To understand which way a currency is going to move towards requires intensive research and observation. It is highly recommended to select a particular pair and practice on that particular currency duo before you move on to other pairs.
Which is the Best Currency Pair?
As the market offers numerous tradable currency pairs, it is difficult to be able to decide on the best currency pair. However, the selection is also dependant on several factors which incline towards the trader’s situation. Choosing a currency will depend on the time of trading suitable to the trader and the kind of market the trader is interested in. For example, if you are interested in the European market then you should choose EUR currency pairs. Some of the most frequently traded currencies are as follows:-
The EUR/USD and GBP/USD pairs are the ones that beginners would mainly start trading with. It is recommended that you start with small sums and then observe how the pairs are faring.