![]() As these currencies are not so frequently traded the market is less liquid and so the trading spread may be wider. Some commonly traded forex pairs (known as ‘major’ pairs) are EUR/USD, USD/JPY and EUR/GBP, but it is also possible to trade many minor currencies (also known as ‘exotics’) such as the Mexican peso (MXN), the Polish zloty (PLN) or the Norwegian krone (NOK). ![]() Currencies are grouped into pairs to show the exchange rate between the two currencies in other words, the price of the first currency in the second currency. In forex trading terms this value for the British pound would be represented as a price of 2.0000 for the forex pair GBP/USD. For instance, the price of one British pound could be measured as, say, two US dollars, if the exchange rate between GBP and USD is 2 exactly. Some confusion can arise as the price of one currency is always, of course, determined in another currency. Just like any other form of speculation, you want to buy a currency at one price and sell it at higher price (or sell a currency at one price and buy it at a lower price) in order to make a profit. When you trade forex your trading costs are comparatively low, and you can easily go long or short of any currency. This exceptional liquidity ensures reliable pricing even at high volumes and enables the tightest possible dealing spreads. ![]() It is the world’s largest form of exchange, trading around $4 trillion every day. ![]() ‘Forex’ is short for foreign exchange, also known as FX or the currency market. If you’re new to forex trading, we’ll take you through the basics of forex pricing and placing your first forex trades. Here you’ll find forex explained in simple terms. ![]()
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