Important Tips On Foreign Exchange Market For Beginners
Imagine you are visiting a foreign exchange centre to get cash for your upcoming holiday. You see a board with red neon numbers written on it with a list of currencies. Let's say you are going to the USA, so you pay 27,000 INR and you get US $400 in exchange. You have just done a forex transaction which means you have bought one currency and sold another. Financial institutions do the same thing on a larger scale. You bought 400$, they'll buy 40,000$.
80% of trades taking place in this market are based on mere speculation. The existence of this market is marked to facilitate the exchange of one currency into another.
Unlike the stock exchange market, currency trade is not carried out on a regulated exchange in the Forex market. It does not have a central governing body and there are no clearing houses that can assure the trade. The Forex trading market is one of the most liquid markets and does not deal with a single exchange. It is made up of a global network of computers that connects participants across the world. This market never shuts down and its scope and size has made it the most accessible market worldwide. Moreover, the FX market does not include commissioning, they make money through the bid-ask spread. Forex centres have dealers and no brokers.
Thai Baht or the Czech Koruna are some of the most exotic foreign currencies being traded today. Major trade is carried out between the 7 most liquid currency pairs across the world. These currency pairs are listed below.
€ EUR/USD (euro/dollar)
€ USD/JPY (dollar/Japanese yen)
€ GBP/USD (British pound/dollar)
€ USD/CHF (dollar/Swiss franc)
€ AUD/USD (Australian dollar/dollar)
€ USD/CAD (dollar/Canadian dollar)
€ NZD/USD (New Zealand dollar/dollar)
The foreign exchange market, like other disciplines, also has its own set of jargons associated with it. If you are a seasoned currency trader you may be well versed with the following currency related jargon which is used frequently and are a part of the financial language.
€ Great Britain Pound (GBP) is also known as Cable, Sterling or Pound
€ US dollar is also known as Greenback or Buck
€ Swiss franc is also known as Swissie
€ Australian dollar is also known as Aussie
€ New Zealand dollar is also known as Kiwi
€ Canadian dollar is also known as Loonie, the little dollar
€ A billion units of currency trade is also known as a yard
80% of trades taking place in this market are based on mere speculation. The existence of this market is marked to facilitate the exchange of one currency into another.
Unlike the stock exchange market, currency trade is not carried out on a regulated exchange in the Forex market. It does not have a central governing body and there are no clearing houses that can assure the trade. The Forex trading market is one of the most liquid markets and does not deal with a single exchange. It is made up of a global network of computers that connects participants across the world. This market never shuts down and its scope and size has made it the most accessible market worldwide. Moreover, the FX market does not include commissioning, they make money through the bid-ask spread. Forex centres have dealers and no brokers.
Thai Baht or the Czech Koruna are some of the most exotic foreign currencies being traded today. Major trade is carried out between the 7 most liquid currency pairs across the world. These currency pairs are listed below.
€ EUR/USD (euro/dollar)
€ USD/JPY (dollar/Japanese yen)
€ GBP/USD (British pound/dollar)
€ USD/CHF (dollar/Swiss franc)
€ AUD/USD (Australian dollar/dollar)
€ USD/CAD (dollar/Canadian dollar)
€ NZD/USD (New Zealand dollar/dollar)
The foreign exchange market, like other disciplines, also has its own set of jargons associated with it. If you are a seasoned currency trader you may be well versed with the following currency related jargon which is used frequently and are a part of the financial language.
€ Great Britain Pound (GBP) is also known as Cable, Sterling or Pound
€ US dollar is also known as Greenback or Buck
€ Swiss franc is also known as Swissie
€ Australian dollar is also known as Aussie
€ New Zealand dollar is also known as Kiwi
€ Canadian dollar is also known as Loonie, the little dollar
€ A billion units of currency trade is also known as a yard
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