How Currencies are Traded in the FOREX Market
Currencies are traded in dollar amounts called "lots". At 100:1 leverage, one lot is equal to $1000 which controls $100,000 of a given currency. This leverage is known as "margin" and some brokers will allow traders even higher leverage than 100:1. This superhigh leverage is one of the reasons that Forex trading has become so popular.
Currencies are always traded in pairs. Each pair has unique notation that expresses which currencies are being traded. The symbol for a currency pair will always be in the form ABC/XYZ. ABC/XYZ is not a real currency pair, just an example of how currency pairs are stated in the market. In this particular example, ABC is the symbol for one country's currency and XYZ is the symbol for another country's currency.
Listed below are some common symbols used. There are symbols for other currencies as well, but these are the most commonly traded ones.
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
As mentioned earlier, currencies are traded in pairs in Forex trading. Thus, a trade always compares one currency to another in terms of how the two currency prices will move relative to each other. Some of the common pairs traded are:
EUR/USD Euro / US Dollar
USD/JPY US Dollar / Japanese Yen
GBP/USD British Pound / US Dollar
USD/CAD US Dollar / Canadian Dollar
AUD/USD Australian Dollar/US Dollar
USD/CHF US Dollar / Swiss Franc
EUR/JPY Euro / Japanese Yen
When you place an order to buy the EUR/USD, 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. In Forex trading, currencies are traded on a price interest point (know as a "pip")system. Each currency pair has its own pip value. Since we have a listed currency pair (i.e., EUR/USD, EUR/AUD), we need a way to talk about its associated number or price. When you see a price quote, you'll see something listed like this:
USD/JPY: 118:51/55
The first component (before the slash) refers to the bid price (what you obtain in JPY when you sell USD). In this example, the bid price is 118.51. The second component (after the slash) is used to obtain the ask price (what you have to pay in JPY if you buy USD). In this example, the ask price is 118.55. The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is .04 or 4 pips.
Chuck Cox is a Technical Writer and Industrial Scientist by professional with a background in statistics. He has used mathematical and statistical methods to invest and trade in the stock, futures, and options markets. Chuck has owned various businesses and presently operates several websites. To learn more about trading the markets, visit his website, http://www.earncashathometoday.com/tradi ng-FOREX.htm
 Google News Updated : Wed, 09 Jul 2008 07:08:13 GMT Cheney's staff censored EPA, ex-official alleges - Boston Globe
Boston Globe - WASHINGTON - Members of Vice President Dick Cheney's staff censored congressional testimony by a top federal official on the health threats posed by global warming, a former official of the Environmental Protection Agency said yesterday. Cheney’s Office Said to Edit Draft Testimony on Warming White House in climate change "cover up" Publ.Date : Wed, 09 Jul 2008 05:36:02 GMT McCain, Obama court Latino group - Los Angeles Times
Los Angeles Times - Sen. John McCain addresses the League of United Latino American Citizens in Washington, DC. today. McCain plans to tell the Latino advocacy group that the nation must secure its borders "while respecting the dignity and rights of citizens and legal ... Candidates talk up Latino connections Candidates woo Hispanic group Publ.Date : Wed, 09 Jul 2008 04:56:13 GMT VMware Ousts CEO Diane Greene - BusinessWeek
BusinessWeek - by Aaron Ricadela VMware ended a long-running battle over its strategic direction on July 8, ousting co-founder and CEO Diane Greene and installing Microsoft veteran Paul Maritz in her place. EMC Replaces the Chief and Co-Founder of VMware, Silencing Talk of ... VMware CEO abruptly replaced Publ.Date : Wed, 09 Jul 2008 05:13:27 GMT Cheesesteaks, troops withdrawals and cigarettes that kill Iranians… - FOXNews FOXNews - by Mosheh Oinounou PITTSBURGH, PA - Sen. McCain, joined by his wife Cindy, made a previously unannounced visit to the Primanti Brothers Restaurant and Bar, a famous Pittsburgh-area sandwich shop, Tuesday evening for a retail stop-turned media ... Caution: Can Iran cigarette jokes be dangerous to McCain's ... McCain jokes about killing Iranians with cigarettes Publ.Date : Wed, 09 Jul 2008 02:11:13 GMT Reiser deal ultimately hinges on judge's OK - San Francisco Chronicle
San Francisco Chronicle - (07-08) 17:14 PDT OAKLAND -- The defense can ask for a deal in a murder case like Hans Reiser's, and the prosecution can sign off on it, but it's the judge who has the final say. Reiser takes plea deal for lesser sentence My interview with murderer Hans Reiser Publ.Date : Wed, 09 Jul 2008 06:23:31 GMT Iran test fires long and medium range missiles - Reuters
Reuters - By Fredrik Dahl TEHRAN, July 9 (Reuters) - Iran has test fired nine long- and medium-range missiles, including one which it has previously said could reach Israel and US bases in the region, state media reported on Wednesday. Iran Test-Fires Missile Capable of Reaching Israel (Update1) Iran test-fires Shahab-3 long-range missile Publ.Date : Wed, 09 Jul 2008 06:02:53 GMT Hunger for victory defines Obama - Financial Times
Financial Times - By Edward Luce in Washington When Democrats criticise John McCain, they first praise his honourable military record. When Republicans do the same to Barack Obama, many begin by conceding that he is an “attractive and talented candidate”. Video: AP Campaign Minute McCain, Obama Trade Early Fire in TV Ads Publ.Date : Wed, 09 Jul 2008 04:54:07 GMT Increased Web Site Traffic |
PARLOT::Ebooks, Scripts,
Websites, and more... Indeed large multinational and individual banks and other major financial... Read More Are you thinking of entering the fast-paced world of day... Read More Forex made easy is as simple as you would want... Read More Most traders tend to concentrate on pinpointing the perfect entry... Read More In recent years, investors have witnessed increased number of investment... Read More Profitable day traders recognize that momentum trading is among the... Read More Everyone trades a little differently. The trading method outlined below... Read More It is possible to buy and sell money from different... Read More QUESTION: If the SP futures fall through support and go... Read More Everybody hates to lose and unfortunately no one is blessed... Read More With every passing year the interest in electronic trading is... Read More Are you looking into a career in day trading? In... Read More IntroductionThe exchange rate refers to the value of the US... Read More What Is Commodity Trading?Commodity futures markets allow commercial producers and... Read More There is one very important factor that you should consider... Read More To make a profit, in the FOREX, a trader can... Read More There is one aspect that is considered as one of... Read More What Is Online Futures Trading?A futures contract is an agreement... Read More Currencies are traded in dollar amounts called "lots". At 100:1... Read More Have you noticed that when someone's trying to sell you... Read More FOREX is the abbreviation for the Foreign Exchange market. FOREX... Read More The first and perhaps most important "secret" is to realize... Read More There are lot's of Forex signals providers out there. New... Read More We all know when you go on a trip to... Read More Profitable day traders recognize that momentum trading is among the... Read More
Adsense
websites
Welcome to the World of Currency Trading
Facts of Day Trading
Forex Made Easy for Everyone
Trade Entry Techniques
Forex Scams: How to Spot Them A Mile Away
Day Trading Course or Day Trading Technique Seminar: Learn Day Trading Education
10 Steps To Professional Day Trading
Forex Currency Trading
Day Trading the Index Futures - How to Judge Good Entries
How To Handle A String Of Losses
Internet and Computer Systems in the FOREX Business
Exploring the World of Day Trading
Factors Influencing a Currency Pair Exchange Rate
Commodity Trading - Advantages and Disadvantages
The Meaning of FOREX Price Charts and How to Use Them
Example of a Profitable Transaction in FOREX
The Margin Advantages of Trading FOREX.
Online Futures Trading - Advantages and Disadvantages
How Currencies are Traded in the FOREX Market
Intrenet Marketing VS Forex Currency Trading
A Beginner?s Guide to FOREX
The Secrets of the Super-Traders
Forex Signal, Forex Signals Advice
How to Trade Currency
Stock Market Report: Day Trading or Swing Trading Online? Stock Investing Information
Affordable and Reliable Web Hosting Starting at $4.49/Month
Forex Profits
The Forex Market-What, When and Why?Forex, FX and the Forex... Read More
Trading Profitably on the Foreign Exchange Market
You may be asking yourself "how does one begin to... Read More
Where is the Market Going?
If you ask me whether the market will have moved... Read More
Intrenet Marketing VS Forex Currency Trading
Have you noticed that when someone's trying to sell you... Read More
Commodity Trading - Advantages and Disadvantages
What Is Commodity Trading?Commodity futures markets allow commercial producers and... Read More
Online Forex
Q1: When you consider that the foreign exchange market has... Read More
Assessing the Opportunities Presented by the New Iraqi Currency
Could it be possible that you are staring right into... Read More
How To Handle A String Of Losses
Everybody hates to lose and unfortunately no one is blessed... Read More
Forex Broker Involvement Optional
To trade on the forex market, the largest financial market... Read More
E-currency Exchange Trading
If you are reading this article you are probably one... Read More
What I Learnt Losing 60,000 My First Year as a Full-time Trader
During my first year as a local (independent trader) on... Read More
Forex Broker
A broker is any person or firm that charges a... Read More
Factors Influencing a Currency Pair Exchange Rate
IntroductionThe exchange rate refers to the value of the US... Read More
FOREX 101: Make Money with Currency Trading
For those unfamiliar with the term, FOREX (FOReign EXchange market),... Read More
An Evaluation of the Devaluation
A Minister of Finance is morally right to lie about... Read More
Financial Crises, Global Capital Flows and the International Financial Architecture
The recent upheavals in the world financial markets were quelled... Read More
Forex Trading
Foreign exchange market, or better known as FOREX, is the... Read More
Risk and Stock Trading Fees: The Two Barriers To Overcome If You Want A Successful Trading Career.
You know the old joke:"How do you make a million... Read More
New Opportunities with Forex Trading
The simplest definition of currency trading is the practice of... Read More
Forex2u Forex Strategy On Successful Forex Trading
The essence of the FX2u Forex strategy is that it... Read More
Types of Foreign Currency Hedging Vehicles
The following are some of the most common types of... Read More
Trading Timeframes
Long TermLong term traders will work from end of day... Read More
A Fools Game
I received an email this week with a question (below)... Read More
The Meaning of FOREX Price Charts and How to Use Them
There is one very important factor that you should consider... Read More
Advantages of Trading FOREX Over Stocks and Commodities
There are many advantages to Trading FOREX as your main... Read More
Currency Trading |