Cool Method to earning money online from Bangladesh with Forex-3

Trading Basics

Making Sense of Quotes and Pairs

When you see a forex price quote, it will always involve two currencies. That is because all currency transactions are exchanges: you are buying one currency and selling another at the same time.

In theory you could trade any two currencies of the world but most trading involves the currencies of the larger financial powers. This does not necessarily mean the biggest or most politically powerful countries. Switzerland is only a small country but it is a major player in the financial markets because of the global importance of the Swiss banks.

There are 6 major forex pairs which together account for 90% of the funds traded on the forex markets. These are:

1)EUR/USD:

The Euro and US dollar

2) GBP/USD:

The British pound and US dollar

3) USD/JPY:

The US dollar and Japanese yen

4) USD/CHF:

The US dollar and Swiss franc

5) AUD/USD:

The Australian dollar and US dollar

6) USD/CAD:

The US dollar and Canadian dollar

The US dollar is involved in 85% of forex trades and therefore it is in all of the major pairs.

Pairs that do not involve USD, such as EUR/GBP, are called cross rates.

The Best Pair for Beginners

The best currency pair for most beginners to trade is EUR/USD. There are two reasons for choosing this pair:

1. It is the most commonly traded pair so liquidity is high and the spread (your cost) is generally low.

2. There is sufficient information available about both currencies. Brokers will supply full charts and it is easy to access financial news and alerts. The second most traded pair is GBP/USD.

You may have access to a particular system that works with another pair. That is fine, but tries to stay with only one pair when you are starting out. Do not follow a system that involves trading a lot of different currencies. It is too difficult to keep on top of all of the prices, trends and news.

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