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How to Determine Which Forex Pairs Have the Biggest Potential



It never closes, it has the largest trading volume in the world, and it’s a form of investing that many just can’t get enough of—the forex market is simply unstoppable in 2018. The famous saying “money never sleeps” certainly applies to the forex market, because no matter the time of day, trades are being opened and closed. When you first start forex trading, the goal is simply to establish a rhythm with your chosen trading strategy, but as you become more experienced, understanding which forex pairs have the biggest upside potential becomes pivotal to securing a positive bottom line. The following considers what exactly you should be looking for in order to stay one step ahead of the market—locating profitable forex pairs along the way.

Understand Market Sentiment

Determining which forex pairs will be worth watching can be made easier by understanding market sentiment, alongside knowing what exactly contributes to market shifts. For example, if the market is in a bullish state, it means that there are more buyers than sellers. However, if those buyers suddenly start to sell, it will trigger a downward trend. This can often occur during bouts of profit-taking.

When you’re analyzing the forex market, you’re ideally looking to catch currencies that are directly opposite of those that are in the state of a sell-off. Let’s look at a recent example: Back in February, the NZD/USD became a currency pair to keep an eye on. The pair traded at 0.7330—close to a high of 0.7241—as support of the NZD/USD became clear in the wake of a USD sell-off. This is an example of catching a currency in the midst of a price shift. Ideally, the goal is to be one step ahead of the market, which is something that several forex indicators can help with.

Trend trading ranks as one of the most popular forex trading strategies around, with its commonly used indicators being prime examples of how one can stay ahead of the curve. Its involvement in determining a downward or upward trend in currency price allows a trader to pinpoint exit and entry points based upon the positioning of the currency’s value within the trend and the trend’s relative strength. Those that choose to trend trade will lean on indicators such as volume measurements, moving averages, stochastics, relative strength indicators, and directional indices—all of which can prove invaluable when determining which forex pairs have the biggest upside potential

Follow the News

Enter the term “forex news” into Google, Bing, and Yahoo, and you’ll be met with around 30 million results. You don’t need to be an expert to figure out that any forex trader is facing a huge amount of data whenever they try to grasp a forex pair’s potential. The reality is that you need to follow the news and process economic data in an effective fashion—the scattergun approach simply doesn’t cut it.

Representing a cheat sheet of sorts, there are four newswires that you should prioritize above all others: The Financial Times, , Bloomberg, CNBC and Reuters. Real-time data is pivotal when it comes to determining the direction of any currency pair. Many forex traders like direct access to news, which some brokers enable by including direct newsfeeds within a platform. Remember, when it comes to forex trading, news moves fundamentals and fundamentals move currency pairs.

Use an Economic Calendar

Considering that there is a lot to process when you’re analyzing and weighing the direction of a currency pair, a little extra help can go a long way. One tool that should be by your side whenever you’re actively trading in the forex market is an economic calendar. Bringing you up-to-date information on major economic events and decisions, an economic calendar will allow you to understand when a currency pair will be in the spotlight and potentially on the brink of an upswing. For example, it will alert you of when a Fed interest rate announcement is due, what rate is predicted, what rate is actually announced, and the potential impact this change will have on the forex market. There are countless economic calendar variants out there, with each varying in quality, so choosing one is a case of personal preference for most.

Economic data is released at such a rate that it’s almost impossible to keep up with everything, but economic data is what moves the market, triggering a forex pair upswing over both the short term and the long term. By linking a currency pair you’re watching to an economic calendar, you can have a much easier time reading its upside potential.

Listen to the Experts

When you click the buy or sell button, the final decision has to be yours, but that doesn’t mean that you shouldn’t keep your ears open to the opinion of others. Experts in the forex field can tip you off to potential currency pair upswings. Various names and blogs—such as BabyPips, FX Street, Daily FX, and Forex Factory—have built reputations by pointing traders in the right direction. You should never take the opinion of anyone else as gospel—this can’t be stated strongly enough. However, by listening to experts, you could be on track to figuring out what forex pairs have the biggest upside potential.


It’s the goal of every forex trader to be profitable. Achieving this, in part, comes down to staying ahead of the curve. This brings about the challenge of snapping up currencies on the brink of an upturn and dumping those that are potentially facing a dip. There is no magic formula that will instantly reveal what currencies have the biggest upside potential, but if you implement the above practices, you might just find the task easier to manage.

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The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.

This post was written by Graeme Watkins

CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience. Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.