Forex trading is the simultaneous purchase of one currency and the sale of another currency.
Currencies are traded through a “forex broker” or “CFD provider” and sold in pairs. Currencies are quoted in relation to another currency.
For example, the euro and U.S. Pat. dollar (EUR / USD) or British pound and Japanese yen (GBP / JPY).
If you trade on the forex market, buy or sell your currency pairs. Think of each pair of coins as a constant state in a “pulling cylinder,” with each coin on its own side of the rope.
The exchange rate is the relative price of two currencies from two different countries.
Exchange rates change depending on which currency is currently stronger.
There are three categories of currency pairs:
The main currency pairs often include the US dollar.
Cross currency pairs DO NOT contain the US dollar. Crosses in which all major currencies are also known as “insignificant”.
Exotic currency pairs consist of an important currency and the currency of emerging markets (EM).
Major currency pairs
The currency pairs listed below are considered “major”.
All of these pairs, on the one hand, have denominations in US dollars (USD) and are the most traded.
While there are eight major currency currencies, there are only major SAN currency pairs.
Compared to crosses and exotics, the price has always been in the majors and offered many business opportunities. Mayors are the smoothest in the world.
Liquidity is used to describe the level of activity in the financial market.
Forex is based on the number of active traders who have bought and sold a specific currency pair and the number sold.
The more often an item is sold, the higher its liquidity.
For example, many people trade the EUR / USD currency pair and to a greater extent than the AUD / USD currency pair. This means that EUR / USD is more liquid than AUD / USD.
Major cross currency pair or minor currency pair
Currency pairs, each of which contains two major currencies other than the US dollar, are known as cross currency pairs or simply “crosses.”
Large crosses are also called “minors”.
Although they are not always sold as large companies, crosses are relatively seamless and still offer many business opportunities.
Do not confuse small currency pairs with seven large currency pairs, all of which contain the US dollar. against one of the six most liquid currencies in the world. The most actively traded crosses were derived from three major currencies outside the USD: EUR, JPY and GBP.
No, exotic couples are not exotic belly dancers of twins.
Exotic currency is money from countries with emerging or emerging markets.
Exotic currency pairs consist of a major currency associated with the currency of an emerging economy, such as Brazil, Mexico, Chile, Turkey or Hungary.
An exotic currency pair usually includes the major currency along with the exotic currency.