By Using A Currency Pair Of U

Category: Finance, Currency Trading.

Forex market is operating through electronic network of banks, corporate firms and individuals without any central body and central exchange.

For example, a broker might buy a pound when the pound to dollar ratio increases, then sell the pounds and buy back American dollars for a profit. Money from all over the world is used for trading in the forex market. If you are entering to the currency trading it s really difficult to decide the best currencies to trade with. Prices of the currencies are influenced by several factors like political conditions of the issuing country, social and economic conditions. Choosing the right currency is like wining the half battle. Stability of the market, inflation also plays, interest rates a major role in the price raising or falling. USD( U.

Each currency playing in the Forex market is given its own three letter code that is used in the Forex quotes. S. dollars) , GBP( United Kingdom pounds) , JPY( Japanese yen) , CAD( Canadian dollars) , EUR( European euros) , AUD( Australian dollars) and CHF( Swiss francs) are the top currencies used in the forex market. By using a currency pair of U. The prices of the foreign currency exchanges are specified in pairs by the forex quotes. S. dollars and Japanese Yens means that the first currency is the base( which is always at 1) and the second currency is the quote. CNY( China yuan) , CZK( Czech koruna) , HKD( Hong Kong dollar) , HUF( Hungarian Forint) , INR( Indian Rupee) , KRW( Korean Won) , MXN( Mexican Peso) , PLN( Polish Zloty) , SGD( Singapore dollar) , ZAR( South African Rand) , and THB( Thai Baht) .

The quote currency or second currency shows how much it costs to buy one unit of the USD, or base currency) Apart from the above mentioned top currencies there are some other one s which are not on the top but are able to make some good investments. Try to concentrate on the major pairs as they are the top traded and therefore charting patterns and technical indicators are generally more reliable. This is extremely important because you really don t want to be trading pairs that have wide spreads simply because it limits your profits more and puts added pressure on you to make correct calls. These pairs have the tightest spreads. Another factor to be considered is location and time at which you are available for trading. It s generally recommended to stick to three of the four major currency pairs- GBP/ USD, EUR/ USD and USD/ JPY but the emerging currencies can also make profit if traded wisely.

For example, the GBP/ USD is most active between around 00 GMT and 200 GMT, and if you are based in Australia due to time difference you would miss most of the action if you wanted to trade in the daytime. Sticking to the right currency and playing with it will let you high in the currency trading game and you will always touch the profit. Each pair is potentially very profitable. There aren t really any best currencies to trade.