Most Volatile Forex Pairs In 2020

Most volatile forex pairs in 2020

The table of average daily range for 28 currency pairs from 2014 to 2019.

The Best Forex Pairs to Trade

(the numbers are rounded)

Average Daily Range of Gold (XAUUSD) was added to the table

Update on January 2, 2020

Forex Average Daily Range Table

CURRENCY
PAIRS
20142015201620172018 2019
AUD/CAD769886.569.56560
AUD/CHF70.5106.58660.560.552.5
AUD/JPY82.5111121748065
AUD/NZD7110586706252
AUD/USD73.59284.55962.548
CAD/CHF6310077615948.5
CAD/JPY76.5100118.577.576.561
CHF/JPY791461158175.558.5
EUR/AUD128187165112107101
EUR/CAD10516415111410879.5
EUR/CHF239653525947
EUR/GBP447087675462
EUR/JPY97137126.588103.573.5
EUR/NZD131211179135121112
EUR/USD7412490788555
GBP/AUD149234222151151157.5
GBP/CAD126184202148141137.5
GBP/CHF9117115210595103
GBP/JPY133171226.5138.5134125
GBP/NZD168279246179167172.5
GBP/USD87123149103110100
NZD/CAD7910595786860
NZD/CHF6610682615649.5
NZD/JPY80110.5110697261
NZD/USD729484635949
USD/CAD67116121898865
USD/CHF5811579696453
USD/JPY73.592.5120.59070.558
XAU/USD(gold)168160183126123155

Methodology Of The Study

In this study, I used ATR (Average True Range), one of my favorite indicators.

Some use ADR to calculate average daily range which is the difference between high and low of a series of candles or bars. That can be an option but it doesn’t include gaps.

Gaps are important because they are a part of the price movement.

Most volatile forex pairs in 2020

You can’t see them in higher timeframes or candles when they happen in the lower ones but they are still there.

Let’s say I want to calculate the average daily range for one year which is something between 260 to 263 candles. There are gaps between this range of candles that are part of the movement of that currency pair so you shouldn’t eliminate or ignore them. They are like invisible candles that do affect the market and make higher timeframes’ candles or bars along with the visible ones.

ATR is the smart one that can do the trick here.

It includes gaps when it calculates the range of candles.

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If there isn’t a gap, it behaves like ADR and uses the difference between high and low as its calculation.

On the other side, if there is a gap, it includes that by choosing from these options:

  • high-low
  • high-previous close
  • low-previous close

Whichever gives the larger amount, it picks that one so if there is a gap it’s calculated.

Why Is Average Daily Range Important?

The average daily range for currency pairs came to my mind a few months after I started forex way back.

The reason that I wanted to know that was I didn’t know how to set the size of TPs and SLs for different currency pairs because I didn’t know the personality or volatility of most of them.

 I knew a handful of them such as EUR/USD or GBP/USD and I’d just been familiar with the crazy GBP/JPY.

Actually the reason I started to think about this issue was when I stumbled upon the crazy one.

Most volatile forex pairs in 2020

I couldn’t understand why I got beaten by that over and over the first day I tried it, so I decided to learn about the volatility and personality of major and minor currency pairs.

The importance of volatility varies according to trading style. It’s not that important when you take long-term positions or you are a position trader or swing trader.

On the other hand, it does matter most when you are a scalper or day trader.

Imagine you are a scalper and you have set a 5-pip SL for your strategy. You’ve also backtested that in eur/use and come to the conclusion that the strategy is a winning one with that setup.

What are the most volatile currency pairs?

Would you gain the same result if you tested on gbp/jpy. I bet your win rate dropped dramatically because you may have more TPs, but there is the spread factor that decreases your winning positions.

On the other hand, if you are a long-term trader and you have larger limitations, a few extra pips won’t be such significant.

Of course, knowing the volatility here can help you to take a better approach in choosing suitable SLs and TPs according to the different currency pairs and their personality and move range.

There is another side where the average daily range can be considered as important particularly if you are a day trader or scalper. As you know, each currency pair move in a specific average range daily, so when your setup appears in the chart and if the currency pair hasn’t exceeded its ADR, the probability that you get result fast is higher.

Imagine we’ve found a setup in a currency pair with the ADR of 100.

Most volatile forex pairs in 2020

The currency pair has moved 20 pips so far and it has 80 to go on average. It has enough potential to move and make the result of our trade clear instantly or at least soon.

Again it may not important for swing or position traders but it defiantly important for a scalper who tries to find positions with quick results especially if you consider liquidity too.

I’ve written a post about the best currency pairs to trade in which I talk about liquidity and mixing that with volatility.

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you can find it here.

Without further ado, let’s take a look at the study I did for 28 major and minor currency pairs from 2014 to 2019 and answer some questions and then we’re going to dig deeper.

Which Currency Pair Is The Most Volatile?

The most volatile currency pair in Forex is GBP/NZD.

It’s been the most volatile one since 2014 (the first year of this study)

GBP/NZD has shown a steady approach during these 6 years and always been number one for this title.

Most volatile forex pairs in 2020

The maximum average daily range for this currency pair is 279 which is related to 2015, and the minimum ADR for it is 167, excluding 2019, which is related to 2018.

Which Currency Pair Is The Least Volatile?

The least volatile currency pair is EUR/CHF, however, in 2015 and 2018 it was the second least volatile one and changed its rank with  EUR/GBP but the total daily average range, from 2014 to 2019, for EUR/CHF is less than EUR/GBP, therefore, it’s number 28 from 28 currency pairs and has the least volatility in total.

The maximum daily average range for EUR/CHF gets back to 2015 with 96 pips that brought it the rank of 25 and the minimum ADR for this currency pair is related to 2014 with as few as 23 pips, which is very low even for this pair.

What Are The Most Volatile Currency Pairs?

We talked about number one in our ranking but now let’s take a look at others.

The most volatile currency pairs are (TOP 10)

  • GBP/NZD
  • GBP/AUD
  • GBP/CAD
  • GBP/JPY
  • GBP/CHF
  • GBP/USD
  • EUR/NZD
  • EUR/AUD
  • EUR/CAD
  • EUR/JPY

There are some replacements in ranking during this period but these currency pairs have always been in the top 10

  • GBP/NZD
  • GBP/AUD
  • GBP/CAD
  • GBP/JPY
  • GBP/CHF
  • EUR/NZD
  • EUR/AUD
  • EUR/CAD

GBP/USD, CHF/JPY, EUR/JPY, and USD/JPY are four other currency pairs that have competed with each other for two remaining spots in the top 10.

(Zoom in to see better)

In 2015 GBP/USD is replaced by CHF/JPY and in 2017 EUR/JPY is replaced by USD/JPY.

Technically, GBP/USD and EUR/JPY are in the top 10 because they’ve been in this category 5 times out of 6 and the other two have been one out of six.

What Are The Least Volatile Currency Pairs?

The top 10 in the least volatile pairs are

  • EUR/CHF
  • EUR/GBP
  • CAD/CHF
  • AUD/USD
  • NZD/CHF
  • NZD/USD
  • AUD/CHF
  • USD/CHF
  • AUD/NZD
  • AUD/CAD

What Is The Maximum Of Forex Average Daily Range?

I also studied these Forex pairs from a different angle.

Best Currency Pairs to Trade in Forex - most volatile currency

It can help traders to make better decisions based on the maximum average daily range of currency pairs. It means the maximum of ADR from 2014 to 2018.

Best Forex Currency Pairs to Trade

I didn’t include 2019 because it doesn’t make any difference and actually it’s from 2014 to 2019 August

How can max ADR help?

When a currency pair gets momentum based on some factors such as news, it starts moving faster and passing through its ADR and the next stop can be the max ADR.

It’s very unlikely that it goes beyond that level except there is one of the most volatile news such as NFP.

In normal condition, if the price gets to that level, you should be more careful if you’ve found a setup because the price has run out of energy and it’s moved far more than its daily average, however, it can be a good opportunity to take advantage of corrections if your strategy allows and if you find a setup based on that.

What Are The Minimum Of Forex Average Daily Range?

On the opposite side, we have the minimum of the average daily range.

It’s the minimum of ADR from 2014 to 2019.

Most volatile forex pairs in 2020

It shows the least pips that the price of each currency pair can reach.

When a pair doesn’t have momentum and it’s ranging, min ADR is the first target after the release of energy and getting momentum. If a pair hasn’t made it to its min ADR yet, it’s the best time to take a position on it.

Forex Average Daily Range

The next stop after that would be ADR and then max ADR.

The best time of the day for this situation is before the overlapping of the sessions for each currency pair.

For example two hours before Tokyo session starts, Sydney session starts, so after two hours of opening of Sydney trading market, it overlaps with Tokyo and if we can find a setup in AUD/JPY before opening Tokyo, we can expect a range between min ADR, ADR, and max ADR depending on which level the pair has reached by then.

The Bottom Line

The difference between the average daily range of currency pairs shows the various movement potential of them, so it’s important to consider that when we want to set limitations (TPs and SLs) for our positions.

Therefore, if your strategy is profitable when you set 10 pips for your TP or SL in AUD/CAD and it isn’t profitable when you include EUR/NZD in your portfolio with the same limitation, you should reevaluate your limitations based on the new currency pair’s ADR.

Determining a static limitation for all forex pairs can be deadly to our win rate and it can turn a profitable strategy to a losing one.

Forex ADR can also be used as a gauge to show us the movement potential of every pair so it can help us to choose the best pairs to trade during a day.

Generally, if a pair hasn’t passed its ADR level, there could be more opportunities to take advantage.

The Most Liquid Currency Pairs

It could be even better if it hasn’t crossed its min ADR. If the pair has gone beyond those levels and you still see potential according to a steep move generated from important news or any other factors, then you can consider the MAX ADR as your target.

let’s wind this post up by these questions:

What is the most volatile major currency pair in forex?

The most volatile major currency pair in forex is GBP/USD with an average ADR of 111.5 pips from 2014 to 2019

What is the most volatile minor currency pair in forex?

The most volatile minor currency pair in forex is GBP/NZD with an average ADR of 201 pips from 2014 to 2019

What is the least volatile major currency pair in forex?

The least volatile major currency pair in forex is shared between AUD/USD and NZD/USD, each with an average ADR of 70.5 pips from 2014 to 2019

What is the least volatile minor currency pair in forex?

The least volatile minor currency pair in forex is EUR/CHF with an average ADR of 55 pips from 2014 to 2019

Help

  • Use the filter for CURRENCY PAIR tab (click on it) to sort it alphabetically 
  • Use the filter of each year to sort currency pairs based on the least and most volatility according to that year
  • Use search to find a currency pair, or a specific category for example USD for USD/JPY, EUR/USD, AUD/USD, etc.

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