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Learn the Basic of Forex Trading and make $10,000 weekly

What is FOREX?
Forex is usually abbreviated as FX, derived from Foreign Exchange. It
means simultaneous buying and selling of currencies.
Currencies are the instrument with which transactions are conducted.
Every nation in the world has its own currency peculiar to it

As long as people will continue to travel from one nation to the other,
the exchange of one currency with the other will continue to happen.
This therefore erases the doubt in our mind about the lifespan of Forex
trading.
Forex Trading will always involve two currencies at a time.
For instance:
EURUSD buy means that we are buying EUR and at the same time
selling USD. By this, we are saying EUROPE economy is stronger
than United State Economy. Forex market is dynamic in its movement
and this is as a result of different macro and micro economic activities
that play out in the country at that particular point in time. This also
goes a long way to give indication of the strength of the currency under
consideration.

  1. Currency Pairs

A currency pair is the quotation of two different currencies, with the value of one currency being quoted against the other. The first listed currency of a currency pair is called the base currency, and the second currency is called the quote currency.

Currency pairs compare the value of one currency to another—the base currency (or the first one) versus the second or the quote currency. It indicates how much of the quote currency is needed to purchase one unit of the base currency. Currencies are identified by an ISO currency code, or the three-letter alphabetic code they are associated with on the international market. So, for the U.S. dollar, the ISO code would be USD.

Major Currency Pairs

A widely traded currency pair is the euro against the U.S. dollar or shown as EUR/USD. In fact, it is the most liquid currency pair in the world because it is the most heavily traded.1 The quotation EUR/USD = 1.2500 means that one euro is exchanged for 1.2500 U.S. dollars. In this case, EUR is the base currency and USD is the quote currency (counter currency). This means that 1 euro can be exchanged for 1.25 U.S. dollars. Another way of looking at this is that it will cost you $125 to buy 100 euros.

There are as many currency pairs as there are currencies in the world. The total number of currency pairs that exist changes as currencies come and go. All currency pairs are categorized according to the volume that is traded on a daily basis for a pair.

The currencies that trade the most volume against the U.S. dollar are referred to as the major currencies, which include:

Minor Pairs

Currency pairs that are not associated with the U.S. dollar are referred to as minor currencies or crosses. These pairs have slightly wider spreads and are not as liquid as the majors, but they are sufficiently liquid markets nonetheless. The crosses that trade the most volume are among the currency pairs in which the individual currencies are also majors. Some examples of crosses include the EUR/GBP, GBP/JPY, and EUR/CHF.

Exotic Pairs

Exotic currency pairs include currencies of emerging markets. These pairs are not as liquid, and the spreads are much wider. An example of an exotic currency pair is the USD/SGD (U.S. dollar/Singapore dollar).

2. BASE AND QUOTE CURRENCY
You can recall that in our definition of Forex, we did say that it is a
simultaneous buying and selling of one currency against the other. The
buy or sell action taken, affects first currency in the pair and the
second at the same time. For instance, if we buy EURUSD, we are
actually buying the EUR and at the same time selling the USD.
In this case, the first currency is the base while the other currency
that appears at the back is the quote currency. The quote currency
serves as reference point to determine the value of the base currency.
If the current price of EURUSD is 1.20000, it means that for every 1
EUR you need 1.20000 dollar to buy it.
If the price of EURUSD increases to 1.2100 therefore means that more
units of USD is needed to obtain one unit of EUR.
By implication, the EUR has strengthened against the USD and the
same way we can say the USD weakened against the EURO

3. PIPs AND POINTS

“PIP” stands for Point in Percentage. More simply though, a pip is what
we in the FX would consider a “point” for calculating profits and loss.
It’s a standardize unit and a smallest amount by which a currency
quote can change.
For USD related currency, it is always 0.0001
For JPY related currency, it is 0.01

4. Bid

A bid is the exchange rate that a market maker quotes to buy a specific currency pair. 

5. Offer

The offer is the exchange rate that a market maker quotes to sell a particular currency pair. A market maker’s offer rate will generally be higher than their bid rate.

6. Spread 

Unless you tell them your desired trading direction, forex market makers and brokers generally provide bid and offer quotations for the exchange rate of the base currency expressed in terms of the quote currency. The difference between this two-way quote is known as the dealing spread or the spread. Widening the dealing spread relative to the Interbank forex market provides an income stream for forex brokers. Some brokers also charge additional trading costs, such as a commission or a per-trade fee.

7. Lots

A lot is a trading unit that represents a minimum transactable amount of a currency pair traded at an online broker or on a futures exchange, although lots are generally not

 used among those operating in the over-the-counter Interbank forex market. As a retail forex trader, common lot sizes include standard lots of 100,000 base currency units, mini lots of 10,000 units, micro lots of 1,000 units and nano lots of 100 units. 

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