1. The market
The foreign exchange market, Forex is also known as Forex or simply FX, the hub of all trade and investment and is essential for the world economy. It 's the largest and oldest financial market in the world with all the tools (eg, futures, options, swaps, location, etc.) trading more than 3 billion dollars a day. To do this in perspective, is 20 to 30 times the daily turnover in global stock markets.
Currency Market
2. The SpotMarket
Currency Trading Basics - Understanding the Top 10 things a new player in the foreign exchange market have
The spot market is the "physical market, where transactions are in cash on the spot, pay at market prices. The spot market for about one trillion U.S. dollars a day.
3. The over-the-counter
Unlike stocks, there is no central exchange for forex trading. It is a decentralized market over-the-counter, where many online operators worldwide, including major international banks to establish long and short courses.
4. L 'Currencies
Five coins represent over 75% of the foreign exchange market: -
• U.S. dollar (USD)
• The European Community € (EUR)
• The Great Britain Pound (GBP)
• The Japanese Yen (JPY)
• Swiss franc (CHF)
5. Couples
Currencies are traded in pairs. Thus, a currency trading is really the simultaneous buying of one currency and selling another (ie, the "exchange" of one currency against another). The four maincurrency pairs are: -
• The euro against the U.S. dollar (EUR / USD)
• The British pound against the U.S. dollar (GBP / USD)
• The United States dollar against the Japanese yen (USD / YEN)
• The U.S. dollar against the Swiss franc (USD / CHF)
6. Tenders
The first currency in a pair as the base currency and second currency is called the currency. A currency quote details the number of units of the counterYou must have a monetary unit of the base currency, as an exchange rate of 1,5,678 thousand hard to buy GBP / USD 1,5,678 thousand U.S. dollars to buy € 1.
7. The contract
Currencies in contracts (sometimes referred to as units or lots) with the number of contracts that can trade in the range of 0.1 to be unlimited. The value of a standard contract is generally considered to be of 100,000 units of base currency.
8. The Pip
PIP stands for "percentage in point and is thecan make the smallest increment of a coin. Most currencies in the forex market are calculated to four decimal places, ie 0.0001 or 1/100th of a point. However, some brokers are now quoted at 5 decimal places that offer more competitive spreads (eg 2.5 instead of 3 pips pips).
9. The pip value
The pip value may be fixed or variable, depending on the currency. When the currency (the currency of a second), the USD is therefore the value of a pip on a standard contract is always10 U.S. $ and the value of a pip, a mini-treaty 0.1 is always $ 1. When the dollar is the currency, the pip value varies depending on the currency exchange rate with the U.S. dollar.
10. The income statement
The profit and loss account of the trade is the change in pips (the difference between Pip and output prices) is determined. To calculate the profit and loss, multiply the number of cores + or - to the pip value.
Disclaimer
The information containedThis article is provided as a general guide available. In order to simplify a complex subject, some details may be an oversimplification. It can vary from one market to the next, so check everything before taking any action.
Currency Trading Basics - Understanding the Top 10 things a new player in the foreign exchange market have
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