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Read, reflect, then practise on demo. Take one useful idea into your next journal entry.
Most beginners choose a currency pair the way they choose a football team: the one they have heard of, or the one that moved most last week. Then they wonder why a 20-pip stop that sat comfortably on EUR/USD gets swallowed in minutes on GBP/JPY, and why the same position size costs a different amount on each.
Pairs are not interchangeable tickers. By the end of this you will be able to read any pair's name and price, sort it into majors, crosses or exotics, explain what changes from one pair to the next, and pick one to practise on demo for reasons you can write down.
How a pair is named and priced
Every pair is written base currency first and quote currency second, using three-letter codes: GBP for sterling, JPY for the yen, CHF for the Swiss franc, CAD for the Canadian dollar. The price is how many units of the quote currency one unit of the base buys. If GBP/USD shows 1.2700, one pound costs 1.27 US dollars.
Two consequences follow. Every position is two positions at once: buying GBP/USD is being long the pound and short the dollar, so a strong US jobs number can move it as much as anything that happens in the UK. And the order is fixed by market convention, not by you. Every screen shows EUR/USD and USD/JPY, never USD/EUR or JPY/USD, so check which way round a pair is quoted before you decide what buying it means.
Majors, crosses and exotics
Traders sort pairs into three groups. The labels are informal and used loosely, which is worth knowing before you read anybody's list, including this one.
| Group | What defines it | Examples | What to expect |
|---|---|---|---|
| Majors | The US dollar against another major currency | EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD, NZD/USD | The deepest liquidity and usually the tightest spreads |
| Crosses, often called minors | Two major currencies, neither of them the US dollar | EUR/GBP, EUR/JPY, GBP/JPY, AUD/JPY, EUR/CHF | Somewhat wider spreads; the yen crosses in particular can swing hard |
| Exotics | A major currency against a smaller or emerging-market currency | USD/ZAR, USD/MXN, EUR/TRY, USD/SGD | Wide spreads, thinner liquidity, sharper gaps, and local holidays and policy surprises |
The dollar sits at the centre of all of it. In the Bank for International Settlements' Triennial Survey of April 2025, the US dollar was on one side of 89.2% of all currency trades. The euro was on one side of 28.9%, the yen 16.8% and sterling 10.2%.
Turnover by pair is just as lopsided. Working from the survey's published tables, EUR/USD alone made up roughly a fifth of global turnover in April 2025 and USD/JPY about 14%. One shift is worth noticing: USD/CNY, the dollar against the Chinese yuan, came to about 8%, ahead of GBP/USD at about 7.5%. The crosses most traders know by name are far smaller. EUR/GBP was under 2%.
How much of the market each pair is
The regulator draws the line somewhere else
If you trade from the UK, a second definition of 'major' matters more than the textbook one, because it decides your margin. In its 2019 policy statement PS19/18, the Financial Conduct Authority defined a major foreign exchange pair, for retail CFDs, as any two of six currencies: the US dollar, the euro, the yen, sterling, the Canadian dollar and the Swiss franc. Those pairs need at least 3.33% margin, or 30:1 leverage. Every other currency pair counts as minor and needs at least 5%, or 20:1.
Put the two definitions side by side and they disagree. EUR/GBP and GBP/JPY, which traders call crosses, are majors in the FCA's sense. AUD/USD and NZD/USD, which every trading textbook calls majors, are minors to the regulator, because the Australian and New Zealand dollars are not on its list. If a position on AUD/USD ties up more margin than you expected, that is why. Margin is not the amount you have at stake, which the 1% cap decides, but it does decide how many positions an account can carry at once.
What changes from one pair to the next
- Pip size. Most pairs move in the fourth decimal place, so a pip is 0.0001. Pairs quoted in yen move in the second, so a pip on USD/JPY or GBP/JPY is 0.01.
- Pip value. On any pair quoted in US dollars, a pip on a standard lot is $10. On everything else it depends on the exchange rate of the quote currency, so it moves from day to day.
- Spread. The cost of every entry. It is usually narrowest on the most traded majors during their busiest hours, and widest on exotics and in thin hours.
- Range. How far a pair tends to travel in the hours you trade. Measure it yourself on the chart rather than trusting anyone's average, because it changes with conditions.
Educational example · demo account, illustrative figures
One 1% cap, two pairs, two different sizes
Take a $10,000 demo account, kept in dollars so the sums stay clean. The 1% cap is $100 on any single idea, whichever pair it is on.
On EUR/USD your plan puts the stop 20 pips away. A pip on a standard lot is $10, so $100 across 20 pips is $5 a pip: half a standard lot.
On GBP/JPY the chart puts the stop 40 pips away, because the pair travels further in the same hours. A pip on a yen-quoted pair is 1,000 yen per standard lot. Assume, for the sum, that a dollar buys 150 yen, which makes that pip worth about $6.67. $100 across 40 pips is $2.50 a pip, or 0.375 of a standard lot.
Same cap, same account, and the GBP/JPY position is about three-quarters the size. Had you copied your EUR/USD size across, that 40-pip stop would have put about $133 at stake, a third over the cap, without you deciding anything.
Illustrative arithmetic on a demo account. The exchange rate is an assumption for the calculation, not a forecast. Check your provider's pip value for each pair before sizing.
One more trap sits between pairs rather than inside one. EUR/USD and GBP/USD share the dollar side and often move in the same direction for the same reason. A long position on each is closer to one larger bet on the dollar weakening than to two separate ideas. Apply the 1% cap per idea, not per position, or two correlated entries quietly double it.
How to choose your first pair
Choosing a pair to practise on demo
Start with one major quoted in dollars
Pip value is fixed at $10 a standard lot and spreads are usually tight. That removes variables while you learn the one that matters most, which is your own execution.
Match the pair to the hours you can attend
A pair is most active when its home markets are open. If you can only trade in the evening UK time, a pair driven by European hours will be quieter than you expect. Our lesson on trading sessions maps this out hour by hour.
Record the spread for a week
At the exact time you plan to trade, note the spread each day on demo. If it regularly takes a large slice of your stop distance, either the pair or the hour is wrong for your plan.
Earn the second pair
Add another only after a full month of journalled demo entries on the first, and choose one that does not share a currency with it, so you are not doubling the same bet.
Free masterclass
The pair is the easy part. The plan is the work
The free 40-minute masterclass covers the order to learn forex in, why demo accounts keep working and then failing, and how to build a demo routine around one to two hours a day.
Watch the free webinar- What are the major currency pairs?
- Traders usually list seven: EUR/USD, USD/JPY, GBP/USD, USD/CHF, USD/CAD, AUD/USD and NZD/USD, each pairing the US dollar with another major currency. UK regulation uses a different definition for margin: any two of the dollar, euro, yen, sterling, Canadian dollar and Swiss franc.
- What is the most traded currency pair?
- EUR/USD. Working from the BIS Triennial Survey's tables for April 2025, it made up roughly a fifth of all global currency turnover, followed by USD/JPY at about 14%. The US dollar was on one side of 89.2% of all trades.
- What is the difference between a cross and an exotic pair?
- A cross pairs two major currencies without the US dollar, such as EUR/GBP or GBP/JPY. An exotic pairs a major currency with a smaller or emerging-market one, such as USD/ZAR. Exotics usually carry wider spreads and thinner liquidity, which makes them harder to learn on.
- Which currency pair is best for beginners?
- There is no best pair, only a better fit. A major quoted in US dollars, traded during its busiest hours, keeps pip value and spreads simple while you learn. Practise it on demo, under the 1% cap, before adding anything else.
What to take away
- A pair is base against quote, and every position is long one currency and short the other.
- Majors pair the US dollar with another major currency, crosses leave the dollar out, and exotics bring in a smaller or emerging-market currency.
- In April 2025 the dollar was on one side of 89.2% of trades, and EUR/USD alone was roughly a fifth of all turnover.
- For UK margin, a major is any two of USD, EUR, JPY, GBP, CAD and CHF. AUD/USD and NZD/USD count as minors.
- Pip size, pip value, spread and range change between pairs, so the position size changes while the 1% cap stays fixed.
- Correlated pairs can double one idea. Apply the cap per idea, not per position.
A currency pair is not a ticker you pick for its recent move. It is a relationship between two economies, with its own cost, its own pace and its own calendar. Learn one of those relationships properly on demo before you add a second, because depth in one pair teaches you more than a passing acquaintance with ten.
The honest caveat
Educational content, not financial advice. Turnover figures come from the BIS Triennial Survey of April 2025, and the margin rules described are the FCA's for retail CFDs; check your provider's current terms. Practise on a demo account first. Trading leveraged products involves significant risk, results are never guaranteed, and every result we publish is an individual outcome shared with permission. The worked example is an illustration written to teach the arithmetic, not a record of anyone's trading.
The Traderess coaching team
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