Currencies are traded in greenback quantities referred to as “lots”. One lot is the same as $1,000, which controls $100,000 in forex. This is what is called the “margin”. You can management $100,000 price of forex for only one,000 {dollars}. This is what is named “High Leverage”.
Currencies are all the time traded in pairs within the FOREX. The pairs have a singular notation that expresses what currencies are being traded. The image for a forex pair will all the time be within the kind ABC/DEF. ABC/DEF is just not an actual forex pair, it’s an instance of an emblem for a forex pair. In this instance ABC is the image for one nations forex and DEF is the image for one more nations forex.
Here are a few of the frequent symbols used within the Forex:
EUR – The forex 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 different currencies as effectively, however these are probably the most generally traded ones.
A forex can by no means be traded by itself. So you cannot ever commerce a EUR by itself. You all the time want to match one forex with one other forex to make a commerce potential.
Some of the frequent 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 forex pairs above seem like a fraction. The numerator (prime of the fraction or “left” of the / nonetheless you need to SEE it) is named the bottom forex. The denominator (backside of the fraction or “right” of the /nonetheless you need to SEE it) is named the counter forex. When you place an order to purchase the EUR/USD, for example, you’re truly shopping for the EUR and promoting the USD. If you had been to promote the pair, you’d be promoting the EUR and shopping for the USD. So if you happen to purchase or promote a forex PAIR, you are shopping for/promoting the bottom forex. You are all the time doing the other of what you probably did with to base forex with the counter forex.
If this appears complicated you then’re in luck. You can all the time get by with simply considering of the complete pair as one merchandise. Then you’re simply shopping for or promoting that one merchandise. Thinking like this can nonetheless allow you to position trades. You solely want to concentrate on the bottom/counter idea for Fundamental Analysis points.
So why is it essential to know concerning the base/counter forex? The base/counter forex idea illustrates what is definitely going down in a Forex transaction. Some of you studying this, know that short-selling was restricted within the inventory market *(Short-selling is the place you promote a inventory/forex/choice/commodity first after which attempt to purchase it again at a lower cost later). But within the FOREX you’re all the time shopping for one forex (base) and promoting one other (counter). If you promote the pair you’re merely flipping which one you purchase and which one you promote. The transaction is primarily the identical. This lets you short-sell with no restrictions.
You need to have the ability to short-sell with no restrictions so you may make cash when the market drops in addition to when it rises. The downside with conventional inventory market buying and selling is that the market has to go up so that you can earn cash. With FOREX buying and selling you may make cash in all instructions. [http://www.1-forex.com]
Σχόλια