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Forex Trading introduction
Forex Trading is short for “foreign exchange trading” which is governed by pairing the value of one country’s currency against another.
For example: If you were to go on holiday to America, then you would have to exchange your English pound Sterling into American dollars in order to buy things in the USA. If you had £100, the amount…
The most common currencies used in Forex trading are:
Country Currency 3 letter symbol
USA US Dollar …
Below is a hierarchy of different people who use foreign exchange for their day to day activities, these different bodies help to make up the structure of Forex trading
Major Banks and Governments
These are comprised of the world’s largest banks. They trade currency between each other in accordance with their exchange rates, known as the interbank market. Governments also need large…
The earth spins slowly and although Forex is a 24-hour exchange, there are certain times during the day when one country’s economy is more active than another’s. If it is in the middle of the night
in Australia, then there will be less activity with its currency than when it is daytime. Moreover if two country’s trading time’s overlap, then both…
How to trade.
How to read an exchange rate
This is an exchange rate between the Great British Pound and The US Dollar.
All exchange rates, or forex quotes contain a pair of currencies.
The first currency is known as the base currency and this is always “1”.
The second pair on the right hand side is known as the quote or counter currency and…
We know that the exchange rates between two currencies constantly fluctuate up and down, depending on a large amount of factors, which govern the actions of forex traders, such as government policies, the activity of trading between two countries, a change in government, or a natural disaster. Some of these, especially the latter two do not happen every day, but…