If you are new to the Foreign Exchange, or Forex, market then you may be unsure about how to choose the best Forex currency market. There is a lot to learn about Forex trading before jumping into it and you will find that it’s best to start out with just one currency to begin with until you build up some experience and knowledge.

One currency will refer to currency pairs, for example the Australian Dollar and the United States Dollar (AUD/USD). But how do you know which pair is the best to start off with?

The United States dollar is the most widely traded currency so it may be good to start out with the USD. One factor you need to consider when choosing currencies is the spread. The spread is the difference between how much you will pay for the currency and how much you will sell it for. You want to choose a currency pair with the smallest spread.

The spread is counted in pips which is percentage in points. So if you see a currency pair quoted at 1.4251/1.4249 then the spread is two pips. If you see a currency pair quoted at 1.4230/1.4210 then the spread is 20 pips.

To find out more about Foreign Exchange, have a read of the Forex Market by Forex Guy.