Try the following ones, under any circumstances, risk management is always of the first priority.


Other major currency pairs, like EUR/USD, USD/JPY, GBP/USD and USD/CHF, are generally more liquid and less volatile, in the other hand, emerging market currency pairs, such as USD/ZAR, USD/TRY and USD/MXN, accounted for some extremely high volatility readings.

Aside from relatively low liquidity, emerging market currencies tend to be highly volatile in particular due to inherent risk underpinning emerging market economies. For example, USD/ZAR exploded nearly 25% higher in just a month.

The least volatile currency pairs tend to be the major currency pairs which are also the most liquid. These economies tend to be larger and more developed which attracts more trading volume and facilitates greater price stability in turn.

The average true range on USD/CHF ranges between 45-pips and 65-pips, a low average true range compared to other pairs. The average true range of a currency is one of the many ways to measure the volatility of a currency pair, such as the Bollinger Band width.

Correlation in between can also have an impact,e.g. the more positively two currencies are correlated to one another might lead to less volatility. We note that the US Dollar and Swiss Franc are both viewed as safe-haven currencies.They tend to strengthen against their sentiment-linked peers when the market experiences episodes of risk aversion, but the two currencies may not deviate much from each other.

Trading a volatile currency pair might warrant a reduced position size, tight levels for stop loss and take profit limit orders. It is important to understand their key characteristics respectively.

Key Points to consider:

1. Increased risk
2. Slippage
3. Correct position size

Ways to measure:

1.Average true range (ATR).
2.Donchian channels.
3.Moving averages


Get notified when there is a new post. Read new post to earn 10 points!

1 Star2 Stars3 Stars4 Stars5 Stars (2 votes, average: 5.00 out of 5)

Rate an article for points!

By Scott Andrews

Scott Andrews is an Australian based trend and swing trader using the daily, 4 hour and 1 hour time frames. He has previously worked in China as a performance coach for their Winter Olympic Team at the time refining his trading skillset. and runs a YouTube channel discussing his thoughts on markets as well as being the Account Manager (Australia) for ForexBriefcase. Recently Scott took on the role as Trading Coach for LCMS Traders.

Leave a Reply

Your email address will not be published. Required fields are marked *