There are hundreds of currency pairs available to trade, but the vast majority of global FX activity is concentrated in just a handful. According to the Bank for International Settlements (BIS) 2022 survey, more than 80% of daily FX turnover runs through seven majors: EUR/USD (23%), USD/JPY (13%), GBP/USD (10%), AUD/USD (6%), USD/CAD (5%), USD/CHF (3%), and NZD/USD (2%).
These pairs dominate for a reason. They are where liquidity, tighter spreads, and consistent volatility come together and where most professional trading activity occurs.
Here’s why that matters:
1. Liquidity Reduces Costs
High turnover means deep order books. That translates into tighter spreads and lower transaction costs.
On EUR/USD, spreads often sit below 0.5 pips. On exotics like USD/TRY, spreads can stretch into dozens of pips. The difference directly impacts profitability, especially for active traders.
2. Price Action with Structure
Majors attract a wide pool of participants, from central banks to hedge funds, which makes their price action more orderly. Support and resistance levels hold with greater reliability, and breakouts are less prone to whipsaw compared to thinly traded pairs. For strategy testing and execution, this structure is critical.
3. Volatility You Can Plan Around
The majors move on familiar catalysts: central bank decisions, inflation data, employment figures. Their volatility is significant but explainable. By contrast, exotic pairs can spike on localized flows or sudden policy shifts, creating unpredictable risk. Majors provide volatility that traders can anticipate and trade around, rather than random price shocks.
4. Correlations Add Clarity
With majors, relationships between pairs add another layer of analysis. EUR/USD and GBP/USD often move together, while USD/JPY tracks U.S. yields. These correlations can help confirm setups or highlight when one market is lagging behind another. Exotics lack this interconnected web, leaving traders with less context.
5. Technical Tools Work Better in Majors
Most indicators, moving averages, RSI, Bollinger Bands, were developed using liquid, widely traded markets. They tend to function more effectively on majors, where price data is smooth and consistent, compared to exotics where illiquidity distorts signals.
My Takeaway
The FX market may look limitless, but in practice, it’s concentrated. More than 80% of turnover flows through seven major pairs, and that concentration explains why they remain the backbone of professional trading.
For us traders, focusing on the majors means lower costs, more reliable setups, and cleaner tools. The truth behind the Big Seven is simple: this is where the market’s real edge lives.