The post below analyzes 10 currency pairs based on five metrics. It explains how these metrics work and why they can serve as a rough proxy of a pair's trendedness.

For the analysis, we chose 10 currency pairs that three conditions: they are very liquid according to the Triennial Central Bank Survey , they have low spreads, they are readily available at retail Forex brokers. Instead, we will look at the following currency pairs for this study presented in alphabetical order :. Rate of change is calculated as previous Close minus current Close and divided by previous Close to get the percentage value. Obviously, this is a crude method of analysis.

However, it can give us some hints on the pairs that trend often. It is calculated in percentage points too. The above calculation would be only a starting point.

To identify the best of the trending currency pairs, we need to calculate precisely the number of periods a pair had been in a trend during some span of time. We need a dependable indicator to identify trend in three different timeframes.

We use moving average for that purpose. Beginners are often advised to use an exponential moving average instead of a simple one as the former lags less i. it follows a trend more quickly. We verify that as well by applying the calculations to both simple and exponential period moving averages.

Consecutive bullish and bearish candles show how likely is a bearish candle is to be followed by other bearish candles and the same for bullish ones.

All calculations are repeated on three timeframes: daily, weekly, and monthly. All currency pairs are analyzed using the data of 5 years back from May 21, We can calculate the absolute change in the exchange rate of a currency pair in a given period day, week, month , using the following formula:.

The median rate of change is calculated by sorting the individual rates of changes T n and either picking the middle one for odd number or calculating the mean of the two middle-most rates of change.

We have to use the percentage values because the direct pips rate of change would differ significantly among currency pairs as their exchange rates are not comparable. The table above shows how mean and median changes per day, per week, and per month differ among currency pairs.

The first noticeable thing is that they don't vary by a lot — there isn't a case where one currency would show twice the average change of the other. Let's look at the charts below to better analyze the differences among the currency pairs' average change for the period.

Unlike in the previous year, there was no clear winner across all timeframes this year. Trends are driven by macroeconomics that tends to play out over specific periods, manifesting through commodity block or major pairs of currencies. While you can trade breakouts or trend continuation avoid mean reverting markets, otherwise you suffer consistent losses. The most liquid or active currencies in the world belong to the US, the EU, UK, Switzerland, and Japan. Diversifying reserves by many central banks into the Eurozone also helps shifts or events that affect the Forex market.

One of the keys to successfully trading such trending pairs is having a long-term outlook. That makes sense for a trader trading in short time frames, say an hour, than those who wait out the long term. But short terms form too many false trade setups, making it hard for you to locate price moves for pairs that work. While some currency pairs form stable, longer trends compared to others, these are mainly trade-able in the long term.

Uptrends form when the price goes up and creates higher lows, which are higher than the previous. To easily locate trends, traders use some indicators or tools that help distinguish the price movement of trending currency pairs. The most famous of these indicators are the Simple Moving Averages, and the 20SMA, the 50SMA, and the SMA are the most common. SMAs give you a mathematical depiction of the start of an obvious currency pair trend.

For instance, the Golden Cross happens when the 50SMA moves above the SMA, indicating an upward trend. Its opposite is the Death Cross, when the 50SMA crosses below the SMA, showing the development of a downward trend. You can tell that a currency pair is forming a trend to tailor a flowing to your strategy is through volatility.

While trend detection is personal, there are ways to identify excellent trending behaviour of currency pairs. Read on to learn how to calculate price changes using logarithmic moving averages for uptrends and downtrends to find the best trending Forex pairs. Each Forex currency pair has a unique personality. Some currency pairs may correlate, but each has differences. This guide takes a close look at the top 10 currency pairs to trade in That doesn't mean you trade all ten currency pairs.

If several currency pairs correlate and you open trades, you are, in effect, significantly increasing your risk. If the price goes against you for one currency pair, it goes against you for the others, meaning you may lose all trades. We look at how each Forex currency pair moves and open up the charts to assess current price action and analyse emerging high-probability trades. As a bonus, we point out potential setups for each currency pair in the top 10 Forex currency pairs to trade, setups for Forex trades that you can take right now.

By the end of the article, you will make a preference for one or two currency pairs you like and potentially have a couple of Forex setups to watch. If you want to dive into the forex market quickly and easily check out eToro Exchange! There are three categories of Forex currency pairs you can trade. The majors are popular with Forex traders because liquidity and volume are good. You may notice that all the pairs include the US dollar , the currency most used for global trading and the other countries also have considerable financial power.

These factors create liquidity and volume every trading day. The minor currency pairs don't include the dollar but other global currencies like the Euro and Japanese Yen. The minor currencies are Japanese crosses, Euro crosses and Pound Sterling crosses.

The Exotic currency pairs have poor liquidity and volatility and are from emerging economic nations like Brazil. The exotics include a major currency such as the US dollar. Due to the lack of liquidity, we won't be featuring the exotics in the top 10 Forex currency pairs to trade. You should consider whether you can afford to take the high risk of losing your money. Down to the nitty-gritty, the following section looks at each Forex currency pair in the top 10 list of the best currency pairs to trade.

The list is in alphabetical order. These Forex currency pairs can help you find good trades and become a profitable Forex trader. The 50 EMA blue line - Experiential moving average crossed over the EMA red line , indicating a possible move to the downside.

Either of these setups is a high probability, especially on the daily chart. When either of the above scenarios occurs, move down to the 1-hour or 4-hour chart for a precision entry. The Australian dollar is affected by commodity prices, and Australia has an active trading relationship with China. With the ongoing Brexit debacle and Covid pandemic, this currency pair displays vast uncertainty.

The enormous price spikes are undoubtedly economic news causing a crazier than usual reaction from the market. Why have we added this currency pair to the top 10 currency pairs to trade? But, it is great to add it here because it's a fabulous example of when NOT to trade. Read Also: Top Chart Patterns Every Trader Should Understand. Recognise the difference between a stable market and an unstable market for trading Forex currency pairs.

It broke a strong resistance zone in April red horizontal line and was bullish until June It landed on another support zone which coincided with the EMA Red wiggly line. Oil prices influence the Canadian dollar, so it's worth checking the charts for oil to see if the prices are bearish or bullish. The Euro and the US dollar are transparent currencies. Price action is easier to read with technical analysis.

These are the areas on the charts where Forex traders sit up and take notice, waiting for a break of or retest of support or resistance. The 50 EMA and EMA have crossed over. When we mention support and resistance zones, these are not typically one specific price. A price zone is a little flexible but centred around the reaction price. Avoid trading at these times.

The current resistance zone is holding for several days, but price action is weak, indicating uncertainty in the market. Japanese central banks monitor the Yen closely. If the Japanese Yen gains strength, the banks intervene because currency prices significantly impact international trade costs and profits. There's not much to play with on this chart. The price could return to support and continue in the range.

The pound and the US dollar are reactive to global economic news. You can, however, trade the pip range as long as you remain alert for a breakout. On the chart, one thing is happening of note. The 50 EMA and the EMA are squeezing together. The price is trying to stay above, which would cause an EMA crossover.

On the daily chart, such a crossover can indicate a change of direction. These aren't the greatest high-probability setups. When browsing the best currency pairs to trade, aim to find a currency pair with the highest probability.

There's no reason to settle for second best if you want to profit from trading Forex.

The present guide provides an updated review of the most trending currency pairs in Additionally, it also provides a script that you can use to calculate trend statistics for any set of trading instruments and timeframes. Measuring a trendedness of a currency pair or any other trading instrument is always a challenge.

It is accentuated by the problem of this trendedness changing over time. A currency pair might be trending strongly one year and be completely trendless the next year. Still, it is possible and important if you trade the trend to compare the trendedness of currency pairs based on a set of metrics to get a better understanding of which currency pairs trend the most and also how exactly they trend.

The post below analyzes 10 currency pairs based on five metrics. It explains how these metrics work and why they can serve as a rough proxy of a pair's trendedness. For the analysis, we chose 10 currency pairs that three conditions: they are very liquid according to the Triennial Central Bank Survey , they have low spreads, they are readily available at retail Forex brokers. Instead, we will look at the following currency pairs for this study presented in alphabetical order :.

Rate of change is calculated as previous Close minus current Close and divided by previous Close to get the percentage value. Obviously, this is a crude method of analysis. However, it can give us some hints on the pairs that trend often. It is calculated in percentage points too. The above calculation would be only a starting point. To identify the best of the trending currency pairs, we need to calculate precisely the number of periods a pair had been in a trend during some span of time.

We need a dependable indicator to identify trend in three different timeframes. We use moving average for that purpose. Beginners are often advised to use an exponential moving average instead of a simple one as the former lags less i.

it follows a trend more quickly. We verify that as well by applying the calculations to both simple and exponential period moving averages. Consecutive bullish and bearish candles show how likely is a bearish candle is to be followed by other bearish candles and the same for bullish ones.

All calculations are repeated on three timeframes: daily, weekly, and monthly. All currency pairs are analyzed using the data of 5 years back from May 21, We can calculate the absolute change in the exchange rate of a currency pair in a given period day, week, month , using the following formula:.

The median rate of change is calculated by sorting the individual rates of changes T n and either picking the middle one for odd number or calculating the mean of the two middle-most rates of change. We have to use the percentage values because the direct pips rate of change would differ significantly among currency pairs as their exchange rates are not comparable. The table above shows how mean and median changes per day, per week, and per month differ among currency pairs.

The first noticeable thing is that they don't vary by a lot — there isn't a case where one currency would show twice the average change of the other. Let's look at the charts below to better analyze the differences among the currency pairs' average change for the period. Unlike in the previous year, there was no clear winner across all timeframes this year.

On the daily timeframe, the difference between the fastest 0. On the monthly timeframe, the situation was different, especially when comparing the median change. The change of 2. The median volatility is calculated by sorting the individual volatility values V n and either picking the middle one for odd N or calculating the mean of the two middle-most value for even N.

As you can see, the mean and median volatility of the studied currency pairs varies even less than the rate of change. Below, you can find six charts that illustrate and help to compare the differences in volatility for the studied currency pairs. One of the most intuitive methods to detect Forex trends is to use a moving average.

We calculate the mean and median number of consecutive closes above and below a period daily, weekly, and monthly moving average both simple and exponential. Unlike previous measures of trendedness, consecutive closes below or above moving averages seem to result in more significant differences between the pairs. The comparison of other pairs is well illustrated by the charts below. Rather surprisingly, each chart had its own winner on the weekly timeframe. The table for the monthly data is presented below.

Unfortunately, it doesn't offer reliable information because 5 years contain not so many monthly candles to work with. A currency pair is generally believed to be trending if it forms consecutive Higher Highs with Higher Lows HHHL in an uptrend or Lower Low with Lower Highs LLLH in a downtrend. We calculate the mean number of HHHL and LLLH patterns for each currency pair on the daily, weekly, and monthly timeframes. On the charts below, you can see the illustration of the data presented in the table above.

It is interesting to see that currency pairs were almost at the same level on the weekly timeframe. A blunter way to measure trends is to record the average number of consecutive bullish or bearish candles. These results don't stack well with the ones obtained in the analysis by other methods. Yet it hints that average bullish and bearish streaks are quite longer at some currency pairs compared to others. Important note: Past performance is not an indication of future performance.

This means that it might be impractical to base actual trading on expectations of the trending behavior to remain the same as they were during the studied period. And now to the most important stuff — a MetaTrader script that can be used to get the same data that is presented in this guide and even more.

You need to compile TrendStats. mq4 for MetaTrader 4 or TrendStats. mq5 for MetaTrader 5 ; TrendsStats. mqh is an include file used by TrendStats. mq4 and TrendStats. The script, when run on any chart, will analyze a list of currency pairs given via input parameters on a range of timeframes also given via input parameters and on a given time period also changeable via input parameters. It will produce. csv files with output results and will also output the results in the Experts tab of the terminal.

Here is the list of input parameters for the script:. If you have some questions about this study of the major currency pairs' trendedness, if you want to suggest some other measures of trendedness to analyze, or if you find some bugs in the TrendStats script, please proceed to our Forex forum.

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By pitting EUR against USD, this currency pair indicates how many US Dollars are needed to buy one Euro. We provide the above information without consideration for risk tolerance and a specific investor's financial circumstances. Major pairs are the most sought-after and liquid, although they may not provide much space for speculation and money-making. Read on to learn how to calculate price changes using logarithmic moving averages for uptrends and downtrends to find the best trending Forex pairs. Think about this: If a market has a trending behaviour, then the equity curve should slope up over time. As most of the currency pairs in this article include the US dollar, trading in the New York session means high liquidity.

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