October 30, 2009
Currency Trading Basics
Currency trading is also known as forex trading and it consists of an online trading community that is growing very fast. The currency trading basics include information about the forex market as well as the popular forex markets and the popular currency abbreviations used by traders.
The forex market is the largest market in terms of volume and you can trade this market 24 hours per day. Traders are able to enter or exit the market whenever they would like and there are no commissions, lock limits, or daily fx trading limits. Currencies are always bought and sold in pairs directly between forex investors.
When learning about the currency trading basics it is important to learn about the different forex markets that are available to forex traders. These markets are listed below.
- USD / JPY - US dollar to Japanese yen exchange rate
- CHF / USD - The Swiss franc to US dollar exchange rate
- AUD / USD - The Australian dollar to US dollar exchange rate
- CAD / USD - The Canadian dollar to US dollar exchange rate
- GBP / USD - The British pound to US dollar exchange rate
- EUR / GBP - The Euro to British pound exchange rate
- EUR / USD - The Euro to US dollar exchange rate
- EUR / CHF - The Euro to Swiss franc exchange rate
There are also abbreviations for foreign currency pairs that forex traders must become familiar with. These are also listed below.
- EUR/USD "Euro"
- NZD/USD "Kiwi"
- AUD/USD "Aussie"
- GBP/JPY "Geppy"
- USD/CAD "Loonie"
- USD/CAD "Beaver
- USD/JPY "Gopher"
- USD/CHF "Swissy"
There are many successful forex traders that prefer to trade currencies simply for the fact that there are only 5 major currencies to keep track of. Many of these traders only focus on three currencies at a time rather than all five when trading currency. This helps these traders to focus in on their trades even further and it typically increases their chances of success.
As you continue to learn about the fx market there are terms that you should become familiar with such as stop order, trailing stop order, take profit order, day order, market order, and limit order. Continue your forex trading education and see if this is the market for you.
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Stephen Bigalow |
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