Currency Trading has emerged as the fastest growing investment to date. Individuals looking further than the domain of traditional investments such as the bonds market have been flocking to the currency markets. Today we will look at the basic trading units in currency trading, the currencies themselves.
All currencies are bought or sold in the variety of a pair. As soon as you buy or sell a currency pair, you are essentially buying a currency and selling another. Nicknames are given to the the majority normally traded pairs. Some of the more general nicknames include Cable (GBP/USD) and the Loonie (Usd/Cad). Major currency pairs are usually crosses made up of the Euro, Pound, Usd, CHF and the Yen. Pairs beyond the scope of the majors are more often than not termed exotic currencies, currencies like the Usd/MXN, Usd/HUf and the Eur/Zar. One regular trait that the majority exotic pairs share among themselves is their high spreads.
The buying of Aud/Nzd in actuality means the buying of the Aussie dollar and the selling of the New Zealand dollar. Assuming you bought a currency pair, the appreciation of the first currency in the pair means a profit for you. A depreciation of the first currency against the second one means a profit if you sold the pair. This is the primary method of earning a profit or making a loss from a currency pair.
Finding a broker that offers exotic pairs is difficult a a good number of the interest in this industry are on the major pairs. Unless you're prepared to pay upwards of 30 or so pips per trade, its best to just stick to commonly traded currency pairs. Different forex brokers have assorted spreads on their currency pairs. In order to be competitive, the majority common online forex brokers have very similar spreads on major currency pairs. Spreads after all, are a means to attract new traders to their brokerage firm.
Almost certainly the best three brokers on the internet at the moment are none other than Fxcm, InterbankFX and Oanda. They all have low spreads and they are reliable as well as reputable. Oanda holds the honor of offering the largest variety of currency pairs in this group. But they are all outstanding forex brokers should you be looking for an online currency broker.
All currencies are bought or sold in the variety of a pair. As soon as you buy or sell a currency pair, you are essentially buying a currency and selling another. Nicknames are given to the the majority normally traded pairs. Some of the more general nicknames include Cable (GBP/USD) and the Loonie (Usd/Cad). Major currency pairs are usually crosses made up of the Euro, Pound, Usd, CHF and the Yen. Pairs beyond the scope of the majors are more often than not termed exotic currencies, currencies like the Usd/MXN, Usd/HUf and the Eur/Zar. One regular trait that the majority exotic pairs share among themselves is their high spreads.
The buying of Aud/Nzd in actuality means the buying of the Aussie dollar and the selling of the New Zealand dollar. Assuming you bought a currency pair, the appreciation of the first currency in the pair means a profit for you. A depreciation of the first currency against the second one means a profit if you sold the pair. This is the primary method of earning a profit or making a loss from a currency pair.
Finding a broker that offers exotic pairs is difficult a a good number of the interest in this industry are on the major pairs. Unless you're prepared to pay upwards of 30 or so pips per trade, its best to just stick to commonly traded currency pairs. Different forex brokers have assorted spreads on their currency pairs. In order to be competitive, the majority common online forex brokers have very similar spreads on major currency pairs. Spreads after all, are a means to attract new traders to their brokerage firm.
Almost certainly the best three brokers on the internet at the moment are none other than Fxcm, InterbankFX and Oanda. They all have low spreads and they are reliable as well as reputable. Oanda holds the honor of offering the largest variety of currency pairs in this group. But they are all outstanding forex brokers should you be looking for an online currency broker.
About the Author:
Read more about currency trading By clicking here as well as the currency pairs over here. Rueben Gomez has been in the forex trading markets for more than 7 years. He operates a finance forum for the discussion and sharing of finance related topics.
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