Some sources refer to currencies as a system of money used among people in a nation. The United Nations currently recognise currencies that are used in countries across the world. Some examples of currencies are the US dollar, the Euro, the British pound and the Japanese yen, which all act as a store of value and which are traded on the global foreign exchange market Forex.

Just like other assets, the forces of supply and demand determine the value of a currency relative to another currency. Increased supply of a currency sinks its value, while increased demand pushes its value up. Check out: 9 of the Best Forex Currency Books to Become a Forex Expert. Each time we place a trade in the market, we have to trade on currency pairs.

Currency pairs consist of two currencies — the first one is the base currency and the second one the counter-currency. In general, currency pairs can be grouped into major pairs, cross pair, and exotic pairs. Major pairs are currency pairs that include the US dollar as either the base currency or counter-currency and one of the other seven major currencies EUR, CAD, GBP, CHF, JPY, AUD, NZD.

Cross pairs, on the other hand, include any two major currencies except the US dollar. Unlike major pairs, cross pairs have higher transaction costs and, at times of lower liquidity, traders can face slippage. Cross pairs are also usually more volatile than major pairs. Finally, exotic pairs include exotic currencies which are not in the Top 10 of the most traded currencies, such as the Mexican peso, Turkish lira or Czech koruna.

Since those currencies can be extremely volatile, they should be left to be traded by the pros. The exchange rate of a currency pair is what all traders follow. The exchange rate is often simply called the price, since it shows the price of the base currency expressed in terms of the counter-currency.

A rise in the exchange rate of a currency pair shows that the base currency is appreciating against the counter-currency or that the counter-currency is depreciating against the base currency. Similarly, a fall in the exchange rate shows that the base currency is depreciating against the counter-currency or that the counter-currency is appreciating against the base currency.

At any given moment, each currency pair has two exchange rates or prices — the bid price and the ask price. The bid price is the price at which buyers are willing to buy, while the ask price is the price at which sellers are willing to sell. Given its nature, the bid price is always lower than the ask price. In the end, buyers buy at the ask price, and sellers sell at the bid price. This means that each price plotted on your chart represents the market equilibrium at that point of time — the price at which the majority of market participants are willing to transact.

Each time you enter into a trade, you have the pay transaction costs for that trade. Swing traders and position traders who have a longer-term approach to trading are less affected by the spread as they open a smaller number of positions and have relatively higher profit targets.

A pip is short from Percentage in Point and represents the smallest increment that an exchange rate can move up or down. Usually, one pip equals to the fourth decimal of most currency pairs. However, some currency pairs have their pips located at the second decimal place, mostly yen-pairs. A pip represents the fourth decimal place of most currency pairs, but there is an even smaller increment that prices can change. Going long simply means to buy, while going short means to sell.

In equity markets, most traders are long in anticipation of rising prices. However, in derivative markets, such as options and futures, there is always an equal number of longs and shorts in the market, because each new contract that is bought needs a corresponding seller who needs to go short, and vice-versa.

There are many cons of trading exotic currency pairs due to large spread, high commission rates, and low liquidity. EURUSD is the best currency pair to trade. It is the most widely traded currency pair in the world. I hope you will like this Article. For any Questions Comment below, also share by below links.

Use Tradingview for technical analysis instead of mt4. Note: All the viewpoints here are according to the rules of technical analysis and for educational purposes only. we are not responsible for any type of loss in forex trading. It will draw real-time zones that show you where the price is likely to test in the future. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. Sponsored Broker Home Forex Trading For Beginners All types of forex currency pairs.

F Forex Trading For Beginners. Post Views: Share this: Twitter Facebook. Like this: Like Loading Related Posts Who is the Best Forex Signal Generator? FOREX trading, also known as currency exchange — Building Trends and Profitability. New Frontiers in FOREX Market Analysis. Are You Planning to Set Up Your Personal Cryptocurrency Exchange Platform?

November 23, Currency Symbols and Names in Forex Trading. Currency Symbols and Names in Forex Trading you must know before opening a forex trading position. It should be noted that all currency symbols consisting of three digits such as the dollar have a USD symbol. The first two letters indicate the name of the country and the third letter indicates the name of the currency, for example, the dollar USD , the first two letters, namely the US, are the names of American countries and D is the abbreviation of the name of the dollar.

The majority of currencies that are traded are called Major Currencies and the following are the names of currencies traded on the forex market.

Post Views: Share this: Twitter Facebook. Like this: Like Loading Related Posts Who is the Best Forex Signal Generator? FOREX trading, also known as currency exchange — Building Trends and Profitability. New Frontiers in FOREX Market Analysis. Are You Planning to Set Up Your Personal Cryptocurrency Exchange Platform? What is Forex Trading? FX online Trading Machine Evaluation. Guide on How to Use Proper Forex Leverage!

Don't Miss. Turn into an Expert with Automated Forex Software program. What is an automated FX System that can give you an advantage? Become an Expert with Automated Forex Currency Trading Software program. Forex4live Trading System, technical analysis with MT4 indicators. This Guide Will Make You Constant Income on Forex. News Feed.

Table of Contents Hide What is drawdown in forexTypes of drawdown DD in forexRelative Drawdown DD Absolute DrawdownMaximum DrawdownWhy…. In such times, even a 1 or 2 adverse pip change can lead to huge losses for investors. This compensation may impact how and where listings appear. Since retail Forex is mostly traded with CFDs , traders are able to bet both on rising prices and falling prices. Technical traders analyse only price-moves as they believe that the price reflects are available fundamental information, and support and resistance trading plays an important role in that analysis. dollar USD , Canadian dollar CAD , euro EUR , British pound GBP , Swiss franc CHF , New Zealand dollar NZD , Australian dollar AUD and the Japanese yen JPY.

Categories:

• Binary Options
• Forex
• Binary Options online
• Forex Brokers
• Forex Bitcoin