LEARN FOREX All Lessons
What is FOREX?
FOREX stands for Foreign Exchange or, in other words, currency trading market. Currently FOREX is the largest and fastest growing financial market in the whole world with a daily volume of almost 3 trillion dollars. Quite a number, won't you say? That is 30 times higher then the turnover of all
Majors
Most commonly traded currencies are referred to as MAJORS. Below is the list of currency abbreviations which we recommend to memorize.
|
Majors |
Abbreviation ( ISO code) |
|
US Dollar |
USD |
|
Japanese Yen |
JPY |
|
Euro |
EUR |
|
British Pound |
GBP |
|
Canadian Dollar |
CAD |
|
Australian Dollar |
AUD |
|
Swiss Franc |
CHF |
Read more: Lesson 2: Majors, Currency Pairs and Base Currency
Written by Forex Vote
All Forex quotes display two prices, the bid and the ask.
BID: The price of the base currency that the dealer is willing to pay in exchange for the quote currency. In simple words, the bid is the price at which you (trader) will sell.
ASK: the price of the base currency at which the dealer is willing to sell in exchange for the quote currency. In simple words, the ask is the price at which you will buy.
Written by Forex Vote
There are two more equations to remember:
Long = buy
If you want to buy a currency (meaning that you want to BUY the base currency and SELL the quote currency) at one price and sell it later on at a higher price, then you are in trade's talk taking a "long position" or "going long".
Short = sell
If you want to sell a currency (meaning that you want to SELL the base currency and BUY the quote currency) in order to buy the base currency back at a lower price as soon as the base currency decreases in value, then you are taking a "short position" or "going short" .
Pip is short for Price Interest Point, also called points. The most common increment of currencies is the pip. If the exchange rate goes from 1.2576 to 1.2577, that is ONE pip. In mathematical terms, a pip means the last decimal place of a quotation. In a down-to-earth way, the pip is how you calculate your profit or loss.
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Introduction
