August 3, 2015

Which Currencies Work Best?

Regarding Pips Predator, we trade the most liquid currencies eg GBP/USD, EUR/USD; but the indicator works on other liquid currencies. We didn’t break it down according to currency pair, because from a profit perspective it didn’t matter where the returns came.

There is some research over millions of trades shown below which shows you a breakdown by currency pair (not PipsPredator users). This is FXCM research. Note most private investors get closes to making a profit in AUD/JPY. We do occasionally trade this pair for exactly that reason! ie it may be an easier pair.

You see the most profitable pairs will be the least volatile and have the smoothest trends and that can be the lesser traded ones oftentimes.

You will also not the pairs on which people make the most winning trades, is not the same as the ones in which they make the most profits! AUD/NZD in the second image below is where they are most likely to win. AUD/JPY you will not from the second image they are least likely to have winning trades, but most likely to be profitable overall according to the top image.

whichcurrenciesbest2 whichcurrenciesbest


Imagine we had more profits from GBPUSD than EURUSD – that would not mean we should trade only GBPUSD necessarily because there was nothing inherent in the prices of GBPUSD to make it different from EURUSD (unlike say Apple shares), and indeed the case could be made profitability should average out therefore against pairs and we should trade MORE EURUSD as a result. In statistics, this is the ‘fallacy of the lucky hand’.