Major and minor currencies
Seven currencies most traded (USD, EUR, JPY, GBP, CHF, CAD and AUD) is called the main currencies. All other currencies are referred to as smaller coins. Don’t you worry about smaller coins, which are only for professionals. In fact we will cover on this page only we call the FAB five (USD, EUR, JPY, GBP and CHF). These pairs are the most liquid and unique coins that actually trade.
Currency to cross
A currency is a currency pair, nor is the US dollar. These pairs issued incorrect behavior price, because the dealer has operated two USD started, in fact. Such as initiation (purchase) of long EUR / GBP is equivalent to buying a pair of the currency EUR / USD and sell a GBP / USD. The cross currency pairs often carry top transaction costs. The three types of change cross traded with greater frequency are the EUR / JPY, GBP / EUR and GBP / JPY.
The base currency is the first currency in a currency pair. It shows how much value of the coin is based, in comparison with the second currency. For example, if the rate of USD / CHF is equal to 1.6350, then a dollar prize money of 1,6350 Swiss francs. In currency markets the dollar is A “Base” usually the currency for quotes, meaning that quotes as a unit of $ 1 per the other currency in the pair is expressed with a cited. The main exceptions to this rule are the British pound, the euro and the Australian dollar.
The exchange rates
The currency of the offer is the second currency in any two currencies. It is often called the currency of PIP and any profit or loss is not done explicitly in this currency.
Price of the offer
The offer is the price the market is willing to buy a certain currency pair in Forex. At this price, the trader can sell the base currency. Left display side of the offer. (Forex Trading)
For example, in the quotation EUR / USD 1.2812 / 15, the offer price is 1.2812. This means that you can sell in dollars to 1,2812 euros.
Price to consult
The ask is the price the market is willing to sell a specific currency pair in Forex. At this price, you can buy the base currency. Displayed on the right side of the appointment.
For example, in the quotation EUR / USD 1.2812 / 15, the price amounts to 1.2815. This means that you can buy us one dollar of 1,2815 euros. The selling price is called also offer price.(Forex Trading)
Bid / ask spread
The spread is the difference between the purchase and the price. A “great figure Quotea” dealer expression referring to the first digits of an exchange rate. These digits are often omitted in quotation marks to dealers. For example, the rate / JPY USD 118.30 may / 118.34, but would verbally cited are, without the first three digits as one of “30 / 34A”.
Exchange rates on the Forex market are expressed by using the following format:
The essential feature of purchase / sale is also the booking for an operating cost of the round trip. The round-trip means both a purchase (or sale) of the trade and sale of compensation (or buy) trading of the same size in the same pair. In the case of the rate EUR / USD from 1.2812 / 15, the transaction cost is three points. (New Business)
The formula for calculating the cost of the transaction is as follows:
Transaction cost = price for purchasing A – offer price
A PIP is the smallest unit of a currency price. Almost all pairs of currencies is the five significant digits, and most couples have the comma immediately after the first digit, for example EUR / USD is equal to 1.2538. In this case, a PIP is the smallest change in the fourth decimal place, i.e. 0.0001. Therefore is the currency of the offer in each pair in US dollars, a PIP is always equal to 1 / 100 cent. (New Business)
A notable exception is the pair USD / JPY where a PIP equals $0.01.
When a new account is opened with a Forex broker, you must deposit a minimum amount the hallway. This minimum varies from agent, agent, and can be as low as $100 to as high as $100,000. (New Business)
Every time that a new business, a certain percentage of the balance of the account to the bank account than the requirement of the initial margin for new base value based on the Currency pair trade, the current price and the number of business units (much called) used. The lot size always refers to the base.
Margin trading can be a profitable investment strategy, but it is important that you take the time to understand the risks. You should be sure that you understand fully how your margin account. Be sure to read the margin between you and your broker agreement. Talk to your broker if you have any questions. (Forex Trading)
The positions in your account could be partially or totally liquidated if the margin available in the account falls below a predetermined threshold your. The user not can receive a call of margin before is settled their positions (the last gift of birthday unexpected). (New Business)
Them calls of margin is can avoid with efficiency through the control of its balance of has of form very regular and through the use of orders of stop-loss (discussed more later) in each position open for limit the risk. To facilitate its use, it most of them platforms of trade in line calculated automatically the losses and profits of their positions open.