What are Minor Currency Pairs?

What Are the Minor Currency Pairs?

Minor pairs, also called “crosses,” combine two major currencies but exclude the U.S. dollar. Examples include EUR/GBP, EUR/JPY, AUD/JPY, and GBP/CHF. Crosses allow traders to express views on the relative strength of economies without direct USD exposure.

Why Trade Minors?

• Regional themes: EUR/GBP reflects Europe vs. U.K. dynamics; AUD/JPY captures commodity sentiment against Japanese monetary policy.
• Carry opportunities: Crosses highlight interest-rate differentials. Pairs like AUD/JPY can generate positive swap for carry traders when rate spreads are wide.
• Diversification: Trading minors reduces overreliance on the dollar index and can smooth equity curves when USD trends stall.

Considerations

Minors typically have wider spreads and thinner liquidity than majors, especially outside the London session. Price action can be choppier, so plan for slightly wider stops and smaller position sizes. Correlations among minors also shift quickly; monitor fundamental catalysts affecting both currencies to avoid being blindsided by regional news.

Keep a dedicated watchlist of key crosses and note which macro data releases affect each side of the pair. Over time you will recognize recurring patterns—such as AUD/JPY reacting to Asian equity moves or EUR/CHF drifting on Swiss National Bank commentary—which can be incorporated into structured trading plans.

Advanced Guidance

Build a repeatable, rules‑based process so decisions are consistent across sessions and instruments. Start from context (higher‑timeframe structure, positioning, macro tone), then define precise triggers and invalidation on execution charts. Track spread and depth so your order type matches conditions. Pre‑compute scenarios (breakout, fakeout, mean‑revert) and map actions for each to reduce hesitation.

Execution Framework

• Plan entries at levels with confluence (structure, momentum, time‑of‑day).
• Place stops beyond the logical invalidation, not arbitrary distances.
• Target at least 2–3R; scale out methodically and trail remainder.
• Avoid thin liquidity windows unless the setup explicitly requires it.
• Record slippage and spreads; poor fills can erase edge.

Review Loop

• Journal setups by session and pair to learn where they excel.
• Tag trades by catalyst (news, trend continuation, range breakout).
• Recalculate expectancy monthly; prune underperforming variants.

Risk Controls

Keep daily loss limits, reduce size after consecutive losses, and pause during regime shifts. Survival enables compounding; treat discipline and execution quality as part of your edge.