Currency trading is always done in pairs meaning you sell one currency to buy another currency. So the proper question is what are the top traded currency pairs. The top traded currency pairs are EUR/USD, GBP/USD, USD/JPY, USD/AUD, USD/CAD, USD/CHF, EUR/GBP. These seven pairs are also known as the major pairs. The daily turnover in the currency market is over $3 trillion. Almost more than 90% of the currency market turnover involve these major pairs.
However, the top most traded pairs are the EUR/USD, GBP/USD and USD/JPY. EUR/USD is the most heavily traded currency pair in the market. As a currency trader what you must do is master trading one or two pairs. For example, you can master trading EUR/USD and GBP/USD. Each currency pair has got its own unique behavior. Mastering a currency pair will help you become familiar with the behavior of that pair at different times of the day as well as different times of the week.
Analyzing a pair requires doing fundamental analysis on two different economies relative to each other. For example if you want to master EUR/USD, you must be familiar with the Euro Zone economic policies as well the US economic policies. These economic policies determine the exchange rate of the currencies over time.
Each currency pair has got its own trading strategies. It is always good to first practice any new trading strategy on the demo account. Since EUR/USD is the most heavily traded pair, it is the most liquid pair in the market meaning the bid/ask spread is low as compared to other currencies. Another advantage of trading EUR/USD is that technical analysis works very well on it.
If you are trading GBP/USD along with EUR/USD you must know that both these pairs are correlated. Correlation means that there is a linear relationship between two random variables. When you trade more than one currency pair at one time, you must understand the correlation between the different pairs Cours EUR USD that you are trading. This correlation is important in knowing the total risk when you trade different currency pairs together.
The currency pairs that are not traded frequently are known as Exotics. The bid/ask spread on exotics is always quite large. This spread is your trading cost. When you trade EUR/USD, most brokers will be quoting a spread that can be 1-3 pips whereas if you trade NZD/USD, the spread can be 8-10 pips. So it is always more advisable to master trading the major pairs where the trading cost is low.