FX Trading Education
If one is familiar with the following words commonly used in FX trading, then making your
first venture into FX trading becomes easier. The following are just some of the terms
commonly used when trading in the FX market:
# Currency pairs - All FX transactions involve a currency pair, as the very essence of this trade is about selling a currency for another.
# Base currency - The base currency is the 1st currency in a pair. In this example -- GBP/USD = x value, the GBP is the base currency, with its value in X value USD.
# Quote Currency - The quote currency is the 2nd currency in a currency pair. The value of the revenue or loss is measured in this currency.
# Minor or major currencies - There are about seven major currencies when speaking of online trading. These are the AUD, CAD, CHF, GBP, JPY, EUR, and USD. Other currencies are considered minor, but among the more often traded are the NZD, SGD, and the ZAR.
# Cross Currency - In a cross currency pair, neither is in US dollars. Such pairs usually experience intricate changes and trends since trading a cross currency pair actually entails the selling and buying of two different pairs of currency.
# Pips - A pip is the smallest unit of price involving any foreign currency. Many currency pairs are made up of five digits. The pip stands for the smallest change at the 4th decimal place.
Even if you have already memorized these terms, there are dozens more to be learned, especially if you are a newcomer in FX trading. The faster you get to learn all of them, the sooner you could earnestly engage in the trading action.
