We have gathered systematic guidelines for forex and understanding the currency rates and pairs giving illustrated explanations for better understanding and memorizing. Currency you might already know currencies are traded in pairs. Currency is regulated by the ISO International Organization of Standardization which controls the order and the codes of currencies. The most popular option how currency rates are displayed is in a line — this is a currency type used to save display space when beginner rates have to be shown.
The difference between bid and ask prices is called the spread — this is the commission that you have to beginner to enter a position. Spread is expressed in pips a pip — the fourth number after the decimal point. This is handy when extra precision is needed for big deals.
Currency rates seem easy until someone currency you to read them out explaining what exactly the rate number represents. A nice system to help remembering how to read the rates is to think of the beginner currency as Number One — for example if the rate for Euro Vs U. Dollar is equal to It is crucial to understand what happens with the currencies beginner the rate changes up or down — which of the currencies has become forex valuable in comparison with the other and vice versa.
If the base currency EUR in our case becomes more valuable than the quote currency U. Dollar — the lever tilts pointing the arrow upwards — this means that the rate is also going to increase meaning that you can get more Dollars from one Euro than before. If in turn the Currency becomes stronger relatively to the Euro then it tilts the lever down to its side pointing the arrow down which indicates that the rate is also going down.
Pairs are three types of pairs: Forex you can see in the chart the most popular pairs include U. The most important rule of the Major pairs that you have to bear in mind is that they often tend to have similar movement trends as they are all associated with the U. Dollar, so trading several majors in the same time is quite risky and in order to diversify your portfolio you should be mixing major pairs with others.
Advantage of the majors: Crosses are pairs that do NOT have U. Pairs that include EURO are called Euro crosses. The top crosses for trading are these four: They are a nice addition to any of the major pair for trading. Exotics are currency pairs that include currencies of emerging and developing countries from the Middle East, Asia and Africa such forex Singapore, South Africa, Mexico, Turkey etc.
Commodity currency is beginner name used for currencies of countries whose economy strongly depends on export of certain materials as gold, silver, oil etc. The problem with commodity currencies: Your email address will not be published. Home Articles e-Books TOP brokers Applications eToro Social trading About Us. Currency quote example A: Currency quote example B: Please share and like this post.
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