Trading is not a 9 to 5 job. It needs your all time and attention. A trader, especially a forex trader, must always be updated with the market. He should be fully aware of the market conditions and operations.
Most volatile currency pairs are key factors for successful trading. It will help you to start well-organized trading. The volatility of each currency pair changes its value according to the trading session.
You must be curious to know about the most volatile forex pairs. Let’s see what they are:
Several currency pairs have a high level of volatility. The most famous forex pairs are AUD/JPY, AUD/USD, EUR, AUD/GBP, GBP/NZD, USD/ZAR, and many more. Some currency pairs have the least volatility because of their positive correlation with each other.
To choose the best volatile currency pair, a trading strategy is very important. Such a trading plan should correlate with the average range of the volatility of these currency pairs. We have more interesting info about this post that will help you to know more.
What Is Volatility In Forex
Before going ahead towards our main topic, it’s important to know about the Volatility in forex trading? What is volatility?
In economics, volatility stands for the density and power of price change in trading. A currency pair should be highly volatile if the price of that currency differs a lot during the targeted period.
On the other hand, these pairs have less volatility if there comes no change in price. Generally speaking, the forex market is considered the trading market with high volatility in which price changes take place more than other trading markets.
It doesn’t mean that all pairs of forex trading attain high or equal volatility. How does a currency pair become volatile? Very simple. It depends upon the base and extracted currencies.
If any one of the volatile currencies permits while trading, too many changes in prices occur.
What are The Most Volatile Forex Pairs
In the forex market, the most volatile forex pairs are known as “Exotic”. What do you know about Exotic? What is it? Don’t worry! I will tell you.
Exotic currency pairs are those currency pairs that contain two currencies or sometimes one currency pair of an appearing market. For example, USD/ZAR, USD/MXN, and USD/TRY are the currency pairs that have high-risk chances because of their most volatility.
Here is a table of the latest currency pairs of high volatility with an average ratio.
Table Of Most Volatile Currency Pairs:
| Currency Pairs | Average Volatility |
| AUD/JPY | 1.12% |
| AUD/USD | 1.07% |
| EUR/AUD | 1.07% |
| NZD/JPY | 1.05% |
| GBP/AUD | 1.05% |
| GBP/NZD | 1.05% |
Some other volatile currency pairs are listed below:
- CAD/JPY
- AUD/GBP
- USD/ZAR
- USD/MXN
- USD/TRY
- GBP/CHF
These are currency pairs that achieved the position of high volatility in the last few years. The average volatility may be changed over time and according to market conditions.
How To Trade Volatile Currency Pairs
There are several ways to trade with the high volatility of currency pairs. The most common and effective way is by using technical indicators.
For successful trading, you have to look out for Volatile Stocks. It is a very easy and simple task. You just have to check out keenly at the execution of main indices. After that, you will be able to get the best entry into the forex market.
Basic volatile indicators are also important to trade currency pairs with high volatility. Recognize the structure of these indicators and the condition of the market whether it is in your favor or not.
What Is the Difference Between High and Low Volatile Currency Pairs
Forex traders must get complete info about volatile currencies both low and high. Dive deeply into the latest account readings and the basic changes that occur in volatile conditions of currency pairs.
To know about the main differences between high volatile currency pairs and low volatile currencies, we have made this table.
Table of the differences:
| High Volatile Currency | Low volatile Currency |
| These currencies have more pips in the specific period of trading. | These currencies move in low pips. |
| High volatile currency has high risks | Low volatile currency has low risk. |
| The high volatility of currencies is more liable for sliding. | The Low volatility of currency pairs is less susceptible. |
| There come big moves in currency pairs because of the high level of volatility. | Low volatility creates small moves. |
| It is easy to find the right position for trading. | It is difficult to figure out the correct position when you should trade. |
The knowledge of both high and low volatility is an essential element of successful trading. In this way, you can measure the risk ratio and select the best currency pairs for trading.
How To Measure Volatility
How do you measure the volatility of currency pairs? Yes, you can measure it after following some simple tricks. It can be measured in certain periods. Simply speaking, you can measure it daily, weekly, monthly, and yearly.
When should you consider a currency pair volatile whether it is low or high? It should be 0.7% over a supported period. There are several indicators that you can use to calculate the volatility of any currency pair.
There are many indicators you can use to calculate the volatility of currency pairs. The most famous and effective ways to measure volatility are given below:
- Moving Averages
- Average True Range
- Donchian Channels
Frequently Asked Questions
What is the most volatile pair?
GBP/CHF and GBP/JPY are the most volatile currency pairs. The average point of these pairs lies between 100-140. It depends upon the trading session in which you start trading.
What are volatile forex pairs?
Many currency pairs are “Exotics” because of their volatility. A few traders select them to trade because of their uncertainty and high risks. Some of the most volatile currency pairs are AUD/JPY, AUD/USD, NZD/JPY, and many more.
Why are GBP pairs so volatile?
There are several reasons but the most possible reason is that the economy of the UK is especially allowed to have a so-called downturn. It is a mixture of both economic growth and high inflation.
Final Verdict
Hopefully, after reading this post completely, you will be able to understand about most volatile forex pairs and what they are? As a trader, you must know that in this trading world each currency pair with more volatility has great chances of risk.
To check the increased volatility of the forex market, you have to trade intraday by selecting the best trading time and indicators. This strategy helps you to trade successfully with currency pairs of high volatility.
If currency pairs get less volatility, a trader must have to get a break or start trading with them in the same session. Help your friends to choose the right currency pair according to the session in which they are going to start trading.
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