These four major pairs are the most liquid pairs in the currency markets and involve the vast majority of the currency trading. Think like this. Majors are the most heavily traded pairs in the currency markets. US Dollar is half of each major pair so if you can understand what drives the USD, it will have a huge impact on your trading plans.

What do you think; USD will weaken or strengthen in the near and medium term? The only thing you need to determine is your bias for USD before each trade. Off course develop a system that guides you in forming an educated bias. Then apply that bias to the major currency pairs.

Let’s say you can only afford to place one mini lot trade. You have a bearish bias for USD. What pair you should trade? You can consider going long on either GBP/USD or EUR/USD. But which one?

Take a look at British Pound (GBP) and the Euro (EUR) both at the same time. You should trade the stronger currency. Find out which of the two currencies is getting stronger. You can find that by taking a look at the EUR/GBP cross charts. If the EUR/GBP cross chart is going down, it means EUR is weakening and GBP is getting stronger. You should choose GBP/USD pair for entering a trade!

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