The actual fence you choose is somewhat of a personal preference depending on your area of the country and the animals you keep. But in my opinion there aren't very many directions people can go.
I've grown to think of the perimeter of the pasture as a moat around a castle. It should be strong, safe, and have a long lifespan. Why? Because more often than not, you're not keeping the sheep in as much as you're keeping the enemy out. Of course, doing all you need to do on a tight budget is often hard to accomplish but the outside fence should be done first, and done well.
I think I've found what I believe is the "right" kind of fence and unfortunately I've found several "wrong" kinds of fencing first. At this moment I have both of the 'bad' fences up in my pasture and I'm looking for the right excuse to rip them out againt. I originally started buying welded wire field fence (shown in right column). But I'm starting to see some serious issues as the fence ages.
To my regret the first problem I realized a little latre was the price. Even though the wire is thinner (14 gage) and comes in smaller rolls of 50 ft, the wire is still more expensive per foot than the thicker (12 1/2 gage) crimped wire field fencing. That was just plainly stupid of me and I admit it. I've taken the time to cost these out and you can see these prices under the pictures at the right of the page.
Besides the expense of the welded wire there are two other issues I needed to contend with. Welded wire breaks easily at the welds (shown in the picture below).

I found that when I finally achieved what I thought was a fool proof way to keep my rams from butting their heads and breaking down all of my wood fencing and barns, they then started butting the fences as a way to alleviate their frustrations from being separated from the rest of the flock.
Watching these rams I found that anything that was stretched 6 - 8 ft or wider between major posts acted like a springboard when either plywood, wire, or 2 x 4's were strung that far across them. It gave them the excitement they were craving and it apparently didn't hurt them. And now that I've fixed those kinds of issues I'm starting to see their aggressions being taken out on my fences.
The third issue I have with the small gage welded wire is corrosion.

Since a little corrosion eats a greater percent of the diameter in a thin wire compared to the same depth in a thick wire, the result is a much faster degradation and a much weaker wire once it starts to rust. Once a fence starts to rust as heavily as what I've shown above, there are no repair options; I'm facing having to replace this section of fence.
The best fence I found was one I installed last summer called a crimped wire field fence (Shown in the right column). Compared to the welded wire this type of fence was less expensive per foot, a thicker gage, and can handle the abuse my rams are taking out on it. And the design of the crimped feature acts as a spring when tightening the fence using the fence stretcher. As you tighten the fence you can actually see the wire straighten out (meaning it might be too tight). This is a nice feature as well it allows for expansion, contraction, and is forgiving so that there is less of a loss of tensile strength on the wire over time.
The only disadvantage is that the rolls are very heavy and bulky since they are longer and are made with the thicker wire. My wife purchased two rolls and it took two guys to manhandle the wire bundles into the car and they needed a forklift to lift the rolls up to the level of the rear gate. Getting the rolls out was much easier but it was still difficult moving them through the grass in the pasture.
The third type of fence I used was high tensile wire which is nothing more than single strands of wire pulled very tightly from post to post. While this was unquestionably the least expensive type of fence, it was the single biggest blunder I made. Thank goodness I didn't try using it on the parameter fence.
Most commonly you'll see high tensile wire used for cattle but instead of plain wire they might use 4-point barbwire. But for sheep -- don't do it even if some of the books out there say it works.
Iexperimented with every variation I could think of including electrifying the bottom three and middle strands of wire, yet, everyone charged right through the fence if they wanted it badly enough. Did they get stung by the electric charger? Yes, but once they realized that if the jump quickly through the fence that they'd only get zapped once, they just jumped through faster and as a herd. I pulled most all of it down now and I use the wire to make repairs to other fences as needed; what a waste of time that was.