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The Seven Most Traded Currencies in FOREX.
Currencies are traded in dollar amounts called "lots". One lot
is equal to $1,000, which controls $100,000 in currency. This is
what is known as the "margin". You can control $100,000 worth of
currency for only 1,000 dollars. This is what is called "High
Leverage".
Currencies are always traded in pairs in the FOREX. The pairs
have a unique notation that expresses what currencies are being
traded. The symbol for a currency pair will always be in the form
ABC/DEF. ABC/DEF is not a real currency pair, it is an example of
a symbol for a currency pair. In this example ABC is the symbol
for one countries currency and DEF is the symbol for another
countries currency.
Here are some of the common symbols used in the Forex:
USD - The US Dollar
EUR - The currency of the European Union "EURO"
GBP - The British Pound
JPN - The Japanese Yen
CHF - The Swiss Franc
AUD - The Australian Dollar
CAD - The Canadian Dollar
There are symbols for other currencies as well, but these are
the most commonly traded ones.
A currency can never be traded by itself. So you can not ever
trade a EUR by itself. You always need to compare one currency
with another currency to make a trade possible.
Some of the common PAIRS are:
EUR/USD Euro / US Dollar
"Euro"
USD/JPY US Dollar / Japanese Yen
"Dollar Yen"
GBP/USD British Pound / US Dollar
"Cable"
USD/CAD US Dollar / Canadian Dollar
"Dollar Canada"
AUD/USD Australian Dollar/US Dollar
"Aussie Dollar"
USD/CHF US Dollar / Swiss Franc
"Swissy"
EUR/JPY Euro / Japanese Yen
"Euro Yen"
The listed currency pairs above look like a fraction. The
numerator (top of the fraction or "left" of the / however you
want to SEE it) is called the base currency. The denominator
(bottom of the fraction or "right" of the /however you want to
SEE it) is called the counter currency. When you place an order
to buy the EUR/USD, for instance, you are actually buying the EUR
and selling the USD. If you were to sell the pair, you would be
selling the EUR and buying the USD. So if you buy or sell a
currency PAIR, you are buying/selling the base currency. You are
always doing the opposite of what you did with to base currency
with the counter currency.
If this seems confusing then you're in luck. You can always
get by with just thinking of the entire pair as one item. Then
you are just buying or selling that one item. Thinking like this
will still enable you to place trades. You only need to be aware
of the base/counter concept for Fundamental Analysis issues.
So why is it important to know about the base/counter
currency? The base/counter currency concept illustrates what is
actually taking place in a Forex transaction. Some of you reading
this, know that short-selling was restricted in the stock market
*(Short-selling is where you sell a
stock/currency/option/commodity first and then try to buy it back
at a lower price later). But in the FOREX you are always buying
one currency (base) and selling another (counter). If you sell
the pair you are simply flipping which one you buy and which one
you sell. The transaction is essentially the same. This allows
you to short-sell with no restrictions.
You want to be able to short-sell with no restrictions so you
can make money when the market drops as well as when it rises.
The problem with traditional stock market trading is that the
market has to go up for you to make money. With FOREX trading you
can make money in all directions.
Danville's high-life Ponzi schemer gets prison San Francisco Chronicle ... bilked people by promising them extraordinarily high annual returns - as much as 36 percent - from foreign currency trading, according to the Securities ...
Forex Is Back, But Different Wall Street Journal As shown in regional central banks' latest semiannual reports on currency trading, those volume gains were driven by a unique combination of crisis-related ...
US growth doubts sap enthusiasm for equities Financial Times In currency trading, the dollar fell below Y86 for the first time in eight months on Friday, capping a poor week for the US unit. The dollar index was down ...
Village life Financial Times Mr Schwarzenbach, who made his fortune with the Interexchange currency trading business he founded, also owns the Lord Foster-designed Dolder Grand Hotel in ...
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There are some common mistakes I've seen traders make in
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FOREX - Where Fortunes
Are Made Everyday
The Foreign Exchange Market - better known as FOREX - is a
world wide market for buying and selling currencies. It
handles a huge volume of transactions 24 hours a day, 5
days a week.
Forex Trading
Systems
The foreign exchange currency market is the largest market
in the world because it trades up to $1.9 trillion daily.
Trade Entry
Techniques
Most traders tend to concentrate on pinpointing the perfect
entry for a trade. However, in reality the entry price is
just one part of the equation.
How to Trade
Currency
We all know when you go on a trip to another country; you
need to take some travelers checks and some cash in the
currency of that country. This can be advantageous because
one country's currency is usually worth more or less than
the other.
The Basics of
Forex
Foreign exchange market is also known as Forex or FX
market. To date, it is the world's biggest "economic
bazaar".
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The European Union (EU) constitution was dealt a double
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What is Forex Trading? Forex, or Foreign Exchange, is the
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What is Forex
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Forex, or Foreign Exchange, is the simultaneous exchange of
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MORE RESOURCES updated Sat. July / 31 / 2010
