Preliminary
In the FX market we buy or sell currencies. Where the trading mechanism is verysimilar in most other markets (like stocks). So it is quite simple, and if you already have experience in stock should you will have no difficulty in doing forex trading. The purpose of forex trading is expected that the price will change where you buy the currency who experienced an increase in value, so you profit from the difference between these values.
Exchange rate / Rate is the ratio of one currency valued against another currency.
For example, exchange rate USD / CHF indicates how many U.S. dollars canpurchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
Writing partner / forex pair is always written in pairs, such as GBP / USD or USD /JPY. The reason why they were written in the pattern of the couple, is because inevery foreign exchange transaction you are simultaneously buying one currency andselling another.
Here is an example of the exchange rate for the pound versus the U.S. dollar: GBP /USD = 1.7500 The first currency listed on the left of the slash ("/") is known as thebase currency (in this example, the British pound sterling), while the second on the right is called the counter currency (in this example, the U.S. dollar).
When buying, the exchange rate tells you how much you have to pay to buy one unit ofbase currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1British pound.
In forex trading, you will buy a pair / couple if you believe that the value of the base currency to rise or rise. And conversely, you will sell your partner if you think the base currency will depreciate (go down) relative to the counter currency.
For example, exchange rate USD / CHF indicates how many U.S. dollars canpurchase one Swiss franc, or how many Swiss francs you need to buy one U.S. dollar.
Writing partner / forex pair is always written in pairs, such as GBP / USD or USD /JPY. The reason why they were written in the pattern of the couple, is because inevery foreign exchange transaction you are simultaneously buying one currency andselling another.
Here is an example of the exchange rate for the pound versus the U.S. dollar: GBP /USD = 1.7500 The first currency listed on the left of the slash ("/") is known as thebase currency (in this example, the British pound sterling), while the second on the right is called the counter currency (in this example, the U.S. dollar).
When buying, the exchange rate tells you how much you have to pay to buy one unit ofbase currency. In the example above, you have to pay 1.7500 U.S. dollar to buy 1British pound.
In forex trading, you will buy a pair / couple if you believe that the value of the base currency to rise or rise. And conversely, you will sell your partner if you think the base currency will depreciate (go down) relative to the counter currency.
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