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important basics of Forex trading in the foreign exchange
6:21 AMimportant basics of Forex trading in the foreign exchange
(such as the euro / US dollar sterling / dollar)
because trading one needs to sell one currency to buy another or vice versa.
The first currency is known that currency
whereas the second one is the quote currency. In the notation
it is possible to write without a separating sign
When a trader has bought a currency pair (bought a certain
volume of base currency and paid for it with the quoted
currency this is called open a BUY position.
When in the future a trader will sell back the same currency pair
will sell the same volume of base currency and get for it the quoted
currency) this is called “close a BUY position.” Similarly
when a trader sold a currency pair (sold a certain volume of
base currency and paid for it with the quoted currency) – it
is called “open a SELL position” and when a trader bought
the same currency pair (bought the same volume of the
base currency and paid for it with the quoted currency) –
it is called “close a SELL position.” Note that the trader does
not have to worry about where to take the base currency for
opening a SELL position or opening the quoted currency for
the BUY position - these currencies are given temporarily by
the company in which the trader opened a trading account.
When opening a BUY position the trader makes his/her decision
based on the exchange rate (currency price) which
provides information about the number of required units of
the quote currency to BUY one unit of base currency. In SELL
position as well the decision is based on the exchange rate
which shows how many units of the quote currency you will
get when selling one unit of base currency. Certainly you
buy a pair when you predict it will appreciate and sell it
when you think that it will depreciate. In most currency pairs
the quoted currency is USD (U.S. dollar). For example in the
EURUSD pair the base currency is EUR and the quoted one USD.
But there are a few exceptions where the base currency
is the USD - for example USDCHF (U.S. dollar / Swiss franc).
why you are getting interested in the Forex market
what attracts you that much and why you have
decided to start trading. Actually there may be many reasons
but let us note that the most important one is the independence.
The advancement of the Internet made the market available
around the globe and thus possible for people to trade online. The
reason of the growing interest is the financial independence
which is possible to gain through going deep into Forex and trading
wisely. No matter you are a doctor teacher manager
or a journalist still you may be involved in this limitless market.
Here you do not have to deal with any boss and bare someone’s
appeal or anger; you are accountable only to your personality
and thus are free to make your own decisions.
Are you interested? Let us introduce you some important features
about Forex market which will help you in studying this interesting
area and obtaining profit from it.
In general the Forex market operates 24/5 (from Monday to
Friday). However 3 market sessions are distinguished: Asian
European and American sessions.
American (New York) opens at 8:00 am to 5:00 pm EST (EDT)
Asian (Tokyo) opens at 7:00 pm to 4:00 am EST (EDT)
European (London) opens at 3:00 am to 12:00 noon EST (EDT)
The most active session is the European then American
and the least active is the Asian. Market participants had
better trade in times of high market activity when trades on
the major stock exchanges around the world take place and
when there is a high probability of publication of interesting
macroeconomic data - this information can be learned
from the economic calendars in the websites of financial companies.
Forex market, learn Forex, USD American Dollar, Forex trading
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