There are two things you need to consider when you are looking for the best currency pairs for Forex traders to use. The first thing is activity and the second is systems.
1. Most Active Currency Pairs
When you are starting Forex trading you will often be advised to start out with the most traded currencies. The reason for this is that high liquidity means that your stops will more often be met without slippage. Another reason is that costs tend to be low. A lot of people in the market creates a tighter spread, and there is also strong competition between brokers, so that means more competitive rates.
Surprisingly the floor with most activity is not in New York, but in London. Despite the fact that the US dollar is the most heavily traded currency, London beats New York for the actual large amount of trading.
This would lead you to believe that the British pound and the US dollar would be the most active set of currency traded, but they are not. Actually the Euro is more traded than the British pound. So the EUR/USD is the most heavily traded pair, even on the London trading floor.
In fact the Japanese yen also beats the pound. Globally the three most traded pairs are EUR/USD first, USD/JPY second and GBP/USD third.
2. Currency Pairs And Forex Trading Systems
The activity of the currency pairs will be the deciding factor if all other things are equal. Even though some systems may require other criteria.
If you tend to prefer automated systems, you will probably find that your software is set to work with a small number of pairs and the most active will not necessarily be the best choice. For example, you may know that the best selling Forex robot FAP Turbo is set to trade EUR/GBP and EUR/CHF. The more active pair here is EUR/GBP, but most users have found that they get better results with EUR/CHF. In fact, many FAP Turbo users are now only trading EUR/CHF with this robot.
The truth is, that if you already have a profitable system that is designed for a certain currency pair, you should stick with it. You should not just assume that your system will work equally well with other currencies, although you can always test new pairs and theories.
If you are trying to develop a new system, and definitely if it involves scalping, you can usually get the most liquidity and trading opportunities together with the lowest costs by working with the most active Forex currency pairs.