Forex Pairs
The simultaneous process of buying of one currency and selling of another currency is carried out by the Foreign Exchange Traders, which demands Forex Quotes for such Currency pairs. One of the currencies, written on the left hand side, is called the base (or transaction) currency. The one written on the right hand side is called the Quote (or the counter) currency. An example can be cited in this regard. In the currency pair EUR/USD, the EUR forms the base currency and the USD forms the Quote Currency.
A Euro is said to be getting Stronger than a Dollar, if for example the quotation moves from EUR/USD 1.3500 to say EUR/USD 1.3510. The reverse happens when the quote EUR/USD moves from 1.3400 to 1.3390. This is the case with regard to any Currency Pair. The Trader makes a profit when there is an increase in the Currency Pair price, provided he is with a long position (buying the 1st currency against the 2nd one) and he suffers from a loss if he is with the short position (selling the 1st currency against the 2nd currency).
The Percentage In Point (PIP) is the smallest measure of price move made by the exchange rate in the Forex trading. The USD/JPY is an exception with regard to each PIP being 0.01, which in other cases one PIP, equals 0.0001.
The Ask price can be defined as the price at which a Broker sells the currency price and the Trader buys one. The Bid price is defined as the price at which the Broker buys a currency pair and the Trader sells one.
When the Bid price is subtracted from the Ask price, the result obtained is called a Spread. The pip is used to express a spread. When the USD or EUR is not included in the currency pair it forms a Cross Rate. Euro Crosses are pairs that include Euro Crosses.
A Trader needs to deposit a certain amount during any kind of transaction. Leverage is the ratio between contract value and deposit. The initial investment, called Margin, covers the credit risk of the broker, while opening a position. The percentage margin requirement equals the inverse of the leverage value.
The most traded and liquid currency pairs are called Majors. Any kind of transaction, involving Majors, account for 90% of the total Forex trading. The EUR/USD and USD/JPY are the most important currency pairs that are actively traded. The GBP/USD rank third, whereas EUR/JPY rank fourth.
You are advised to check out all the terms and conditions subjected to market risk and the Risk Warning Notices, as there is high level of risk associated with your capital investments as a consequence of which you may lose out on money, more than you had invested. This will help you in judging whether you are a trader suitable to carry out such transactions. - 23218
A Euro is said to be getting Stronger than a Dollar, if for example the quotation moves from EUR/USD 1.3500 to say EUR/USD 1.3510. The reverse happens when the quote EUR/USD moves from 1.3400 to 1.3390. This is the case with regard to any Currency Pair. The Trader makes a profit when there is an increase in the Currency Pair price, provided he is with a long position (buying the 1st currency against the 2nd one) and he suffers from a loss if he is with the short position (selling the 1st currency against the 2nd currency).
The Percentage In Point (PIP) is the smallest measure of price move made by the exchange rate in the Forex trading. The USD/JPY is an exception with regard to each PIP being 0.01, which in other cases one PIP, equals 0.0001.
The Ask price can be defined as the price at which a Broker sells the currency price and the Trader buys one. The Bid price is defined as the price at which the Broker buys a currency pair and the Trader sells one.
When the Bid price is subtracted from the Ask price, the result obtained is called a Spread. The pip is used to express a spread. When the USD or EUR is not included in the currency pair it forms a Cross Rate. Euro Crosses are pairs that include Euro Crosses.
A Trader needs to deposit a certain amount during any kind of transaction. Leverage is the ratio between contract value and deposit. The initial investment, called Margin, covers the credit risk of the broker, while opening a position. The percentage margin requirement equals the inverse of the leverage value.
The most traded and liquid currency pairs are called Majors. Any kind of transaction, involving Majors, account for 90% of the total Forex trading. The EUR/USD and USD/JPY are the most important currency pairs that are actively traded. The GBP/USD rank third, whereas EUR/JPY rank fourth.
You are advised to check out all the terms and conditions subjected to market risk and the Risk Warning Notices, as there is high level of risk associated with your capital investments as a consequence of which you may lose out on money, more than you had invested. This will help you in judging whether you are a trader suitable to carry out such transactions. - 23218
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Want to become a successful trader? In that case your first port of call should be at Forex Currency Pairs for all the information you need to become an expert.
posted by X - Men @ 9:36 AM
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