Understanding Currency Pairs: Majors vs Minors
Understanding currency pairs are where everything begins in forex trading. They represent the value of one currency compared to another. Understanding how these pairs work is the foundation of successful trading. In this article, we’ll explore the difference between major currency pairs and minor currency pairs. By the end, you’ll see why mastering this knowledge can help you make smarter trades.
What Are Currency Pairs?
Source: compareforexbrokers.com
A currency pair shows the exchange rate between two currencies. The first is called the base currency, while the second is the quote currency.
For example:
EUR/USD = 1.10 means 1 Euro equals 1.10 US dollars.
Every trade you make in forex involves buying one currency and selling another at the same time.
Understanding Currency Pairs: Majors Explained
Major currency pairs are the most traded in the forex market. They always include the US dollar (USD). The most common major pairs are:
EUR/USD (Euro vs US Dollar)
GBP/USD (British Pound vs US Dollar)
USD/JPY (US Dollar vs Japanese Yen)
USD/CHF (US Dollar vs Swiss Franc)
USD/CAD (US Dollar vs Canadian Dollar)
AUD/USD (Australian Dollar vs US Dollar)
NZD/USD (New Zealand Dollar vs US Dollar)
Why Traders Choose Majors
High liquidity – Easier to enter and exit trades.
Low spreads – Transaction costs are cheaper.
Strong analysis resources – Many traders and analysts focus on these pairs.
In short, majors are often the best starting point for beginners.
Understanding Currency Pairs: Minors Explained
Minor currency pairs are also known as cross-currency pairs. These do not include the US dollar.
Examples of minor pairs include:
EUR/GBP (Euro vs British Pound)
EUR/JPY (Euro vs Japanese Yen)
GBP/JPY (British Pound vs Japanese Yen)
AUD/JPY (Australian Dollar vs Japanese Yen)
Why Trade Minors?
Diversification – Opens opportunities beyond the US dollar.
Volatility – Some minor pairs move quickly, creating potential for bigger profits.
Regional focus – Traders who specialize in European or Asian markets often follow these pairs.
However, minors usually have wider spreads and lower liquidity than majors.
Majors vs Minors: Key Differences in Currency Pairs
The biggest difference between major and minor currency pairs is the role of the US dollar.
Majors always include the USD. This makes them highly liquid and widely traded. Because of this, spreads are usually lower, and trades are easier to execute. Majors also have more predictable price movements since they attract the most analysis from traders worldwide.
Minors do not include the USD. Instead, they focus on cross-currency trades like EUR/GBP or GBP/JPY. These pairs can be more volatile, with larger swings in price. Liquidity is generally lower compared to majors, and transaction costs (spreads) can be higher.
In simple terms, majors are the stable backbone of forex trading, while minors offer more variety and sometimes higher risk–reward opportunities.
How Aurex Trading Helps You Trade Currency Pairs
At Aurex Trading, we provide powerful tools to guide your forex journey. One of our top features is the Buy & Sell Indicator.
This indicator helps traders:
Spot clear entry and exit signals.
Reduce hesitation when the market moves.
Trade majors and minors with more confidence.
Want to take your trading to the next level?
For more information, visit the Aurex Trading website.