Forex Trading Basics – Part C

Major vs Minor Currency Pairs:

Similar to the major currency pairs, there are minor currency pairs. Both the sort of currency pairs have their own beneficial aspects.

The quotation of a currency pair comprises of two prices

- Lower price
- Higher price

The difference between these two prices is called spread.

The minor currency pairs have larger spreads than the major currency pairs do have. This becomes a disadvantage if you are a short term trader. Profiting out with minor currency pairs is a bit harder than the major currency pairs.

The spreads that the minor currency pairs have is extremely diverged. Some minor currency pairs have a spread of 8 points whereas some have a tremendous point of about 200!

The four major currency pairs already mentioned are very safe to handle with. They always have tight spreads. All the four pairs are volatile the whole day. That is, GBP/USD and EUR/USD pairs are volatile during the first 12 hour period. USD/JPY pair is volatile during the following 12 hours of a day. So the any of the major currency pairs is active in a day at a particular time!