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Forex Basics

Learn everything from basic forex concepts to unique advanced trading strategies and systems.

Introduction

Forex Basics

Forex Trading Features

Forex Basics

Forex Market Driving Forces

Forex Basics

Ways to Trade Forex

Forex Basics

Currency Trading Facilitators

Forex Basics

Currency Trading Quotes

Forex Basics

Leverage

Forex Basics

Swap Rates

Currency Trading Quotes

Currencies are typically denominated in pairs. With the currency you are buying at the top and the currency you are selling on the bottom. For example EUR/USD means that you are buying the Euro and selling the US Dollar. So if you feel like the Euro is going to go up relative to the USD you can buy that pair. And if you feel like the USD is going to go up relative to the Euro you can sell the pair.

Currency pairs are quoted based on how much of the currency you are selling is required to buy 1 unit of the currency you are buying. Let's use the EUR/USD example again. If it takes exactly 1.5 US Dollars to purchase 1 Euro, than the quote will show up as 1.5000. Typically the currency pair rate will go to 4 decimal points. The fourth digit after the decimal point is known as a pip which is 1 unit of movement for a currency pair. Because the Japanese Yen has such a low value, pairs with the Yen on the bottom are quoted to the second decimal point.

When trading Forex there are two prices for each pair of currency traded. There is a selling price, which is called the bid and there is a buying price, which is called the asking price. So you can sell the currency pair at the 'Bid' price and you can buy the currency pair at the 'Ask' price. Typically the Ask price is higher than the Bid price, which is the cost you incur to facilitate your forex trading transaction. Below is an example of what a quote looks like for a typical currency pair:

Forex Basics

The most popular currencies traded (85% of daily Forex trading) are called the "Majors". The "majors" consist of the following currencies: USD, JPY, EUR, GBP, CHF, CAD, AUD. These stand for US Dollar, Japanese Yen, Euro, Sterling, Swiss Franc, Canadian Dollar and Australian Dollar. The symbols of currencies such as the ones above work like such: The first two letters stands for the country (i.e. USD = United States) and the last letter stands for the currency name (i.e. USD = Dollar). There are however some exceptions as with Euro and Swiss Franc. Next >

Forex Basics   Forex Basics
Forex trading involves significant risk of loss and is not suitable for all investors. While you can earn a cash bonus,
you can also lose money due to the inherent risk of trading. Read full disclosure.

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