The best currency pairs for volatility and scalping; Introducing the top 7 currency pairs

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However, increased volatility does not mean that all currency pairs are suitable for scalping. Liquidity, the range of price changes and the hours of market activity play an important role in the outcome of short-term trading. Next, suitable currency pairs for these two methods are examined at different levels of trade, and the factors affecting the choice of each one are considered.

Which currency pair is more suitable for volatility?

Choosing the right currency pair should be done based on volatility, liquidity and trading hours. Each currency pair has the most activity at a certain time; Therefore, the trader must first determine his trading hours and then choose the appropriate currency pair for that period.

Acquaintance with Forex sessions And the overlapping time of important markets in this direction helps to choose a more suitable currency pair for fluctuation in each time frame.

the first stage; Selection of review criteria

The most important criteria for choosing currency pairs for scalping and volatility are:

• Good swing range and fast price movements

• Low spread and high liquidity

• Coordination with the trading session

• Paying attention to the time of publication of economic news

• Risk management and loss limit determination

High volatility alone does not mean that a currency pair is suitable. A currency pair that moves quickly but has a high spread can spend a large portion of a trader’s potential profit on trading. Low liquidity also increases the possibility of slippage, i.e. execution of an order at a price different from the expected price.

The publication of economic news may also move the price in a few seconds and cause a temporary increase in the spread. For this reason, checking the release time of important data via Farsi Forex Factory It can help traders to be aware of important economic events on the desired currency pair before entering into short-term trades.

the second stage; Selection based on experience

Different currency pairs are suitable for different levels of traders due to the amount of volatility. For this reason, the choice of currency pairs should be made according to the trader’s experience in the financial markets.

medium swing; Suitable for all traders

The USDJPY, AUDUSD, and USDCAD currency pairs are suitable for traders who want to swing with less excitement due to their moderate and relatively balanced intraday volatility.

1. Australian Dollar to US Dollar | AUDUSD

• volatility and liquidity: moderate volatility and adequate liquidity; This currency pair is one of the popular currency pairs in the market due to the dependence of the Australian economy on the export of raw materials and commodities.

• Suitable for: Scalping and daily volatility.

• Suitable time: The most trading activity takes place in Sydney and Tokyo sessions. The period from 3:30 to 9:30 Tehran time is one of the suitable periods to check the fluctuations of this currency pair.

• Effective economic factors: Precious and industrial metal price changes, China’s economic statistics as Australia’s trading partner and Australian central bank policies.

  
  

  Risks: China’s macroeconomic data and unexpected geopolitical developments can cause fake breaks and false volatility.

2. US dollar to Japanese yen USDJPY

• volatility and liquidity: very high liquidity; The Japanese yen is one of the most traded currencies in the forex market.

• Suitable for: daily scalping and volatility; This currency pair has good liquidity and price movements in the Tokyo session.

• Suitable time: Tokyo session from 3:30 to 9:30 Tehran time.

• Effective economic factors: The interest rate difference between the US Federal Reserve and the Bank of Japan.

• Risks: The possibility of sudden intervention by Japanese monetary authorities in the currency market is one of the most important risks of trading on this currency pair.

3. US Dollar to Canadian Dollar | USDCAD

• volatility and liquidity: moderate to high volatility and suitable liquidity; This currency pair is considered one of the most popular currency pairs in the forex market due to the extensive trade relations between the United States and Canada and the dependence of the Canadian economy on oil exports.

• Suitable for: daily scalping and volatility; A suitable option for intermediate level traders looking for fairly regular price movements and short-term trading opportunities.

• Suitable time: The most trading activity usually takes place in the New York session and especially when the London and New York sessions overlap. The release of economic data from America and Canada in this period can cause more fluctuations.

• Effective economic factors: Global oil price changes, monetary policies and interest rate differences between the Central Bank of Canada and the US Federal Reserve, employment data, inflation and GDP of the two countries, and changes in trade relations between the US and Canada.

• Risks: The simultaneous release of important economic data from the US and Canada, sudden fluctuations in oil prices and unexpected changes in monetary policies can cause sharp price jumps, widening spreads and fake failures.

high volatility; Suitable for professional traders

Cross currency pairs (a currency pair that does not contain the USD), especially EURJPY and GBPJPY, tend to move faster. This feature creates volatility opportunities, but also increases trading risk; Therefore, they are more suitable for experienced traders.

1. Euro to Japanese yen EURJPY

• volatility and liquidity: high volatility and suitable liquidity; This currency pair is a cross type and consists of European and Japanese currencies.

• Suitable for: daily scalping and volatility; In the overlapping session of London and Tokyo, it can create good fluctuations with an acceptable spread.

• Suitable time: 10:30 a.m. to 12:30 p.m. Tehran time, according to the seasonal changes in the session hours.

• Effective economic factors: The difference in interest rates between the European Central Bank and the Bank of Japan, along with the economic data of these two regions.

• Risks: Higher spreads compared to major currency pairs and the possibility of direct intervention by Japanese authorities in the currency market.

2. British pound to Japanese yen GBPJPY

• volatility and liquidity: Very wide swing range; This currency pair is known as the “dragon of currency pairs” due to its rapid price movements.

• Suitable for: Volatility of experienced traders; One of the most volatile options is when the London and Tokyo sessions overlap, but it is not recommended for beginner scalpers.

• Suitable time: 10:30 a.m. to 12:30 p.m. Tehran time, according to the seasonal changes in the session hours.

• Effective economic factors: The release of UK economic data and the difference between the monetary policies of the Bank of England and the Bank of Japan.

• Risks: relatively high spread and fast price movements; Trading on this currency pair can be accompanied by an increase in spread and slippage.

low and reasonable fluctuation; Suitable for beginner traders

For novice traders, high liquidity, low spreads and manageable price movements are more important. EURUSD and GBPUSD are options to consider; GBPUSD usually has higher volatility though.

1. Euro to US Dollar | EURUSD

• volatility and liquidity: The most liquid currency pairs of the forex market; Due to the high depth of the market, it usually has a very small spread and is known as the “king of currency pairs”.

• Suitable for: daily scalping and volatility; One of the most suitable options for scalpers and beginner traders.

• Suitable time: London and New York sessions overlap.

• Effective economic factors: Interest rate differentials and monetary policy differentials between the US Federal Reserve and the European Central Bank, along with economic data such as the Consumer Price Index (CPI).

• Risks: Geopolitical developments and the publication of important economic news can directly affect the fluctuations of this currency pair.

2. British pound to US dollar | GBPUSD

• volatility and liquidity: low spread and high price movements; A suitable combination for short-term traders, an important part of which depends on the market activity in the London session.

• Suitable for: daily scalping and volatility; A usable option for both beginners and professional scalpers, considering the amount of volatility and risk management.

• Suitable time: London and New York sessions overlap.

• Effective economic factors: Monetary policies and the difference in interest rates of the Central Bank of England and the US Federal Reserve, inflation data, gross domestic product and UK employment and political and economic developments in this country.

• Risks: High sensitivity to UK economic news and sudden price jumps when important data is released.

Final comparison of currency pairs

The table below shows the typical features of these currency pairs. The actual spread depends on the broker, account type and market conditions, and the hours of the sessions are also shifted with the change of daylight saving time.

Overall, EURUSD is a good option for novice traders to consider due to its high liquidity and low spreads. GBPUSD also creates short-term opportunities, but has higher volatility. In contrast, cross-yen currency pairs, especially GBPJPY, require more experience and risk management.

summary

Choosing the best currency pair to swing does not necessarily mean choosing the most volatile option. The right currency pair should have sufficient liquidity, low spread and manageable price movements during trading hours.

Therefore, it is better to determine your trading session first and then choose the right currency pair by checking the volatility, liquidity, trading cost and experience level.