First principles
Majors, crosses and exotics
Every currency pair is a relative price: buying EUR/USD is simultaneously a bet that the euro strengthens and that the dollar weakens. Because there are two currencies in every trade, choosing an instrument is really choosing which two stories you want exposure to at once.
Forex pairs fall into three conventional groups, distinguished by how much of the world’s trading volume passes through them:
- Majors all contain the US dollar and represent the most heavily traded currencies in the world. They carry the deepest liquidity and therefore the tightest spreads. NOVEDOX lists seven.
- Crosses (sometimes called minors) pair two major currencies without involving the dollar EUR/GBP, GBP/JPY, AUD/NZD. Liquidity is good but thinner than the majors, spreads are wider, and moves are often larger because you carry two independent stories rather than one against a common anchor. NOVEDOX lists twelve.
- Exotics pair a major currency against a smaller or emerging-market economy. Spreads are materially wider, liquidity is thinner, and moves can be abrupt and driven by domestic politics or capital controls. NOVEDOX lists four.
Alongside these sit crypto instruments, which trade continuously and behave differently again higher volatility, no session structure, no weekend close.
The three questions that should drive your choice
- Does it move when I am at the screen? An instrument that does its work while you are asleep is not tradable by you. See best times to trade.
- Can I afford its cost of entry? A wider spread means the price must travel further before you break even. On short-horizon strategies this dominates.
- Can I size correctly for its volatility? The stop distance that works on EUR/GBP will be hit in minutes on GBP/JPY. Volatility is not risk if you size for it, and is fatal if you do not.
Group one
Forex majors
Seven dollar pairs carrying the bulk of global FX turnover. If you are starting out, your instrument is almost certainly on this list.
| Symbol | Description | Typical character |
|---|---|---|
| EUR/USD | Euro against the US dollar | The most traded pair in the world and the conventional starting instrument. Tightest spreads, orderly moves, deep liquidity throughout London and New York. Driven by the ECB-versus-Fed policy gap and euro-area versus US data. |
| GBP/USD | British pound against the US dollar | Liquid but noticeably more volatile than EUR/USD, with sharper intraday swings. Most active from the London open. Sensitive to Bank of England policy and UK political developments. |
| USD/JPY | US dollar against the Japanese yen | Highly liquid and closely tied to the US, Japan interest rate gap and US bond yields. Tends to fall in risk-off conditions as the yen is bought as a haven. Active across both the Tokyo and New York sessions. |
| USD/CHF | US dollar against the Swiss franc | Frequently moves close to the inverse of EUR/USD, so holding both is often one position in two forms. The franc is a haven currency, strengthening when European or global risk appetite deteriorates. |
| AUD/USD | Australian dollar against the US dollar | A growth-sensitive and commodity-linked pair. Responsive to Chinese economic data, industrial metal prices and global risk appetite. Most active during the Asian session and into the London open. |
| USD/CAD | US dollar against the Canadian dollar | Strongly influenced by crude oil, since energy is a major Canadian export, rising oil generally weighs on the pair. Both economies release data in the same North American window, so it can move twice in one morning. |
| NZD/USD | New Zealand dollar against the US dollar | The least liquid of the majors, with slightly wider spreads. Behaves similarly to AUD/USD, growth- and commodity-sensitive, and is influenced by dairy and agricultural prices as well as RBNZ policy. |
Group two
Forex crosses
No US dollar involved. Useful when you have a clear view on two specific currencies and do not want dollar strength or weakness contaminating the trade. At the cost of wider spreads and larger ranges.
| Symbol | Description | Typical character |
|---|---|---|
| EUR/GBP | Euro against the British pound | Typically the tightest-ranging pair on the platform. Two closely linked economies produce small daily moves, which suits range strategies and punishes traders who apply major-pair stop distances to it. |
| EUR/JPY | Euro against the Japanese yen | A widely used barometer of risk appetite. It tends to rise when markets are confident and fall sharply when they are not. Liquid, with reliably large daily ranges. |
| GBP/JPY | British pound against the Japanese yen | Among the most volatile pairs a retail trader will meet, combining sterling’s sensitivity with the yen’s haven behaviour. Large ranges attract traders and destroy those who size it like EUR/USD. |
| EUR/CHF | Euro against the Swiss franc | Historically one of the quietest pairs, given the close economic linkage between Switzerland and the euro area. Ranges are narrow for long periods and can break sharply when European risk sentiment shifts. |
| EUR/AUD | Euro against the Australian dollar | Pairs a defensive currency against a growth-sensitive one, so it often trends persistently when the global growth outlook changes. Wider spreads and large ranges; most active across the London session. |
| GBP/CHF | British pound against the Swiss franc | Combines a volatile currency with a haven, producing sharp moves in periods of stress. Thinner liquidity than the majors, so spreads and slippage deserve attention. |
| AUD/JPY | Australian dollar against the Japanese yen | A classic risk-sentiment pair, growth currency against haven currency. Often tracks global equity indices closely, which makes it a useful confirmation instrument as well as a tradable one. |
| CHF/JPY | Swiss franc against the Japanese yen | Two haven currencies against each other, so broad risk sentiment largely cancels out and relative monetary policy dominates. Lower liquidity and wider spreads than the majors. |
| CAD/JPY | Canadian dollar against the Japanese yen | Effectively a combined bet on oil and on risk appetite. Rising crude and a confident market push it higher; risk-off does the opposite quickly. |
| NZD/JPY | New Zealand dollar against the Japanese yen | Similar in character to AUD/JPY but with thinner liquidity and a slightly wider spread. Historically a carry-trade favourite, which means positioning can unwind abruptly. |
| AUD/NZD | Australian dollar against the New Zealand dollar | Two closely related economies, so the pair often mean-reverts within a range and is driven by the relative policy stance of the RBA and RBNZ rather than global risk. Most active in the Asian session. |
| AUD/CAD | Australian dollar against the Canadian dollar | Two commodity currencies, but exposed to different commodities, industrial metals and Chinese demand versus crude oil. Moves are often driven by that divergence rather than by broad risk sentiment. |
Group three
Forex exotics
Higher potential movement, considerably higher cost and risk. These are not beginner instruments.
| Symbol | Description | Typical character |
|---|---|---|
| USD/ZAR | US dollar against the South African rand | Highly volatile and sensitive to commodity prices, domestic politics and global risk appetite. Spreads are far wider than on any major, and moves can extend rapidly in one direction. |
| USD/TRY | US dollar against the Turkish lira | Among the most volatile currency pairs available anywhere. Driven by domestic monetary policy, inflation and political developments. Carries substantial gap and slippage risk and demands very small position sizes. |
| USD/MXN | US dollar against the Mexican peso | The most liquid of the exotics listed here, closely tied to the US economy and to oil. Trades actively during the North American session and reacts strongly to US data and trade policy news. |
| USD/SGD | US dollar against the Singapore dollar | The calmest of the four, reflecting Singapore’s managed exchange-rate framework, which tends to dampen large moves. Most active during the Asian session; spreads are wider than a major but narrower than the other exotics. |
Group four
Crypto
Eight instruments trading continuously, no session structure, no weekend close, and volatility well beyond anything in the forex list.
| Symbol | Description | Typical character |
|---|---|---|
| BTC/USD | Bitcoin against the US dollar | The largest and most liquid crypto instrument, and the one the rest of the market tends to follow. Volatility is high by forex standards but generally the lowest of the eight listed here. |
| ETH/USD | Ethereum against the US dollar | The second most liquid. Usually correlates strongly with bitcoin while moving with a larger amplitude in both directions. |
| SOL/USD | Solana against the US dollar | Substantially more volatile than bitcoin, with rapid trends and deep retracements. Sensitive to overall crypto risk appetite. |
| XRP/USD | XRP against the US dollar | Prone to long quiet periods punctuated by very sharp, headline-driven moves. Can decouple from the rest of the crypto complex on news specific to it. |
| ADA/USD | Cardano against the US dollar | Broadly follows the direction of the larger crypto assets with higher relative volatility and thinner liquidity. |
| DOGE/USD | Dogecoin against the US dollar | Strongly sentiment-driven and capable of extreme percentage moves on social and news catalysts. Among the least predictable instruments on the platform. |
| LTC/USD | Litecoin against the US dollar | An established asset that tends to track bitcoin’s direction with moderately higher volatility and thinner liquidity. |
| LINK/USD | Chainlink against the US dollar | Higher volatility than the large-cap assets, with moves often amplified relative to broad crypto risk sentiment. |
Know what you own
What drives each currency
Every pair is two of these stories in tension. Learn the individual drivers and the pairs explain themselves.
USD, US dollar
Driven by Federal Reserve policy expectations, US inflation and jobs data, and Treasury yields. Also the world’s primary reserve currency, so it frequently strengthens in global risk-off episodes regardless of US data, a dual role that can pull it in two directions at once.
EUR, Euro
Driven by ECB policy, euro-area inflation and PMI data, and the relative growth picture between the bloc and the US. German data carries disproportionate weight, and periphery sovereign spreads matter in periods of stress.
JPY, Japanese yen
A traditional haven that tends to strengthen when markets are fearful. Highly sensitive to the gap between Japanese and US bond yields, and to Bank of Japan policy, which has historically diverged sharply from other major central banks.
GBP, British pound
Driven by Bank of England policy, UK inflation and labour data, and domestic political developments. More volatile than the euro and inclined to sharp moves around policy meetings and fiscal announcements.
AUD, Australian dollar
A growth-sensitive commodity currency. Responds to Chinese economic data, industrial metal and iron ore prices, and Reserve Bank of Australia policy. Typically strengthens when global risk appetite improves.
NZD, New Zealand dollar
Behaves similarly to the Australian dollar, commodity- and growth-linked, with additional sensitivity to dairy and agricultural export prices and to RBNZ policy. Less liquid, so moves can be sharper.
CAD, Canadian dollar
Closely linked to crude oil prices, since energy dominates Canadian exports, and to the health of the US economy given the trade relationship. Bank of Canada policy and Canadian jobs data complete the picture.
CHF, Swiss franc
The archetypal haven currency, strengthening when European or global risk sentiment deteriorates. Swiss National Bank policy and the bank’s historical willingness to intervene in currency markets are important background considerations.
Hidden exposure
Correlation between pairs
Because each pair contains two currencies, positions that look independent frequently are not. This is the most common way a carefully risk-managed trader ends up with three times the exposure they intended.
Positive correlation
EUR/USD and GBP/USD typically move in the same direction, because both are largely expressions of dollar strength or weakness. Long both is broadly a double-sized short-dollar position, not two diversified ideas. The same applies to AUD/USD and NZD/USD, and to most crypto instruments against each other.
Negative correlation
USD/CHF generally moves against EUR/USD, so being long EUR/USD and short USD/CHF is largely the same trade expressed twice. Similarly, being long EUR/USD while long USD/JPY partially offsets your dollar exposure which is not necessarily wrong, but you should know that is what you have done.
Correlation is unstable
Two pairs that tracked each other closely for months can decouple when one central bank changes course. More dangerously, correlations tend to increase during market stress: in a genuine risk-off event, positions that were behaving independently all move against you at once, precisely when you most need them not to.
Managing it in practice
- Add up your exposure per currency, not per ticket. Three long positions each containing a short dollar leg is one large short-dollar bet.
- Set a cap on aggregate risk across correlated positions. For example, no more than 2% of equity at risk on any single currency at one time.
- Prefer instruments that give genuinely different exposure when you want diversification, such as a euro cross alongside a dollar pair.
- Assume correlations rise when you least want them to, and size for that assumption.
Focus
How many pairs should you trade?
Fewer than you want to. New traders typically open a watchlist of fifteen instruments, scan them all every morning, and end up taking whichever one produced the most convincing-looking chart, which is a selection process optimised for finding stories, not edges.
The case for concentration is simple. Every instrument has its own personality: how far it typically travels in a day, how it behaves at session boundaries, which releases matter to it, how respectfully it treats support and resistance. That knowledge only accumulates through sustained attention to the same chart.
A reasonable progression
- Months 1–3: one pair. EUR/USD is the standard choice, tightest spreads, deepest liquidity, most orderly behaviour. Learn its daily range, its session rhythm, and which data moves it.
- Months 3–6: two or three. Add instruments that are not simply the first one in disguise. If your first is EUR/USD, adding GBP/USD teaches you little; adding USD/JPY or AUD/JPY gives genuinely different behaviour.
- Beyond: five to seven maximum. Enough that something is usually setting up, few enough that you actually know each one. Most consistently profitable discretionary traders follow a small, stable list.
When a wider watchlist makes sense
If your process is fully rules-based and mechanical, screening more instruments can genuinely increase opportunity, because the rules do the selecting rather than your mood. That is a different discipline from discretionary trading and requires the rules to be written down and tested first.
Starter shortlist
Sensible first instruments
EUR/USD
The default. Tightest spread, deepest liquidity, most documented behaviour of any pair in the world.
USD/JPY
Liquid, with a clear relationship to bond yields and risk sentiment, and it teaches you that pips are 0.01 on yen pairs.
AUD/USD
Good for Asia-Pacific traders, with a legible commodity and risk-appetite story.
EUR/GBP
A calm, range-prone pair, useful for practising mean-reversion and for anyone whose available hours are the London morning.
Common questions
Choosing instruments
Which pair is best for a complete beginner?
EUR/USD, for practical rather than mystical reasons: it has the tightest spreads of any pair, the deepest liquidity, the most orderly price action, and it is active during the hours most European and American traders are awake. Cheaper entry costs and smaller gaps mean your early mistakes cost less.
Why are pips different on yen pairs?
Because of the scale of the quote. EUR/USD trades near 1.08 and is quoted to four decimal places, so a pip is 0.0001. USD/JPY trades near 150 and is quoted to two decimal places, so a pip is 0.01. The convention exists so that one pip represents a broadly comparable proportional move on both.
The practical consequence is that your pip-value calculation differs. The pip value calculator handles both cases.
Are volatile pairs more profitable?
No. They offer more movement, which is not the same thing. Volatility increases both the potential gain and the potential loss symmetrically, and it requires wider stops for the same probability of survival, which means smaller position sizes for the same cash risk.
What actually changes profitability is whether your edge holds on that instrument and whether you size correctly for its range. Traders who move to volatile pairs seeking faster returns while keeping their old position size are simply increasing risk.
Should I trade crypto or forex?
They suit different circumstances. Forex offers deeper liquidity, tighter spreads and a clear session structure, and its drivers, interest rates, inflation, growth, are well documented and scheduled. Crypto trades continuously, which suits people whose free hours fall outside forex sessions, but carries substantially higher volatility and less predictable drivers.
If you are learning position sizing and risk management, forex majors are the gentler environment. Both are available on the same NOVEDOX account.
Can I hold positions in several pairs at once?
Yes, but count your exposure by currency rather than by position. Long EUR/USD, long GBP/USD and short USD/CHF is one concentrated short-dollar bet at roughly triple the size you think you have, and all three will lose together on a strong dollar day.
A workable discipline is to cap total risk on any single currency, not just any single ticket, at your normal per-trade risk allowance.
Does NOVEDOX offer stocks, indices or commodities?
The instruments live in the terminal today are the 23 forex pairs and 8 crypto instruments listed on this page. Additional asset classes are part of the roadmap rather than something you can trade now. We list what exists, not what is planned. See platforms for current platform status.
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