Picking the pair by its spread at that hour

[Fairman]

Picking the pair by its spread at that hour

Traders often pick a pair by habit. EURUSD because everyone does, or GBPJPY because it moves. A more useful question is what the pair costs right now.

Spreads vary through the day. EURUSD is cheapest during the London and New York overlap. USDJPY is good in Tokyo and New York. AUDUSD is better in Asia than a lot of people assume. GBPJPY has a high but stable spread, and its range may justify it.

A simple table helps: for each pair, the average spread in each session, measured from the broker's own data. It takes an evening of work and changes decisions.

The idea is matching the pair to the hour. The cheapest pair at the time, with a decent range, is a better candidate than the pair favoured by habit.

It also helps with capacity. Switching pairs when the spread widens keeps trading going without paying a premium.

A one page table pinned beside the screen, with pairs down the side and sessions across the top, filled with the median spread for each, makes the choice instant.

Which pair has the best cost-to-range ratio at the time of day when most trading happens?