- EUR/USD
- USD/JPY
- GBP/USD
- USD/CHF
Forex for beginners starts with understanding the
concepts of trading and simple terminology. Grasping the most basic concepts
and terms sets the foundation to learn more about the intricacies of the
market along with the more advanced concepts and theories.
d complex. Here, we will go over the
basics so that you, the reader, can decide if you wish to learn more. The
basic concept behind the foreign exchange (or forex) market is for trading
currencies, one pair against another. It’s the world’s largest market, consisting of almost $2 trillion in daily volume
and is growing rapidly.
The value of one currency is determined by its
comparison to another currency via the exchange rate. The major currencies
traded most often in the foreign exchange market are the euro (EUR), United
States dollar (USD), Japanese yen (JPY), British pound (GBP) and the Swiss
franc (CHF). These combine to form the most commonly traded currency pairs:
The first currency of a currency pair is
the base currency; the second currency in the pair is the countercurrency. One can think of currency pairs
as a single unit. When buying a currency pair, the base currency is being
bought, while the counter currency is being sold. The opposite is true when
selling a currency pair.
Foreign currency trading is conducted without a
central exchange, but instead is traded over-the-counter (OTC). Unlike other
markets, this decentralization allows traders to choose from a large number of
different dealers or brokers with which to place trades. This also provides
the means to compare prices and pip spreads before buying or selling.
A number of tools and charts are used in
forex currency trading and the educated trader uses
these tools extensively to perform accurate analysis to determine whether to
buy or sell a given currency pair.
The forex market is operated in Europe, Asia
and the United States in overlapping shifts, so currencies are constantly
traded 24 hours a day. No single entity has the capability of influencing the
market – at least not for very long.
With the forex market coming to the forefront of the public consciousness and
the tools and education being offered – some at little or no cost – placing a forex currency trade can be as easy as buying
online.
Forextips.com is committed to educating the forex
trader in all aspects of foreign currency trading. Click hereto get information on a free forex webinar to
help you maximize your success in the forex market!
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