Reading quotes in the Forex market can confuse first, but over time will become easier if you get used to it. The main problem that must be fought – is familiar with the various terms associated with the quote. First of all codes, using three letters used to identify and distinguish between different currencies around the world.
Buying of one currency and selling another at the same time is always carried out in any operations on Forex. Two currencies involved in the transaction currency, form a currency pair. To identify the current pair, at first show a base currency, then the currency quotes or currency counter. Slash will also be found between the two currencies. Also, the two prices will be posted. The first of them – is the selling price or piecework, and the second – as the price of a request. Like the currency pair, you should also place a slash between the two prices. When you specify the value of the application will be placed only the last two decimal places.
An example of a currency quotation could be 119,68 USD / JPY. Here, the base currency – the US dollar and the quote currency – the Japanese yen. Thus, this application would exchange quotation indicates how many Japanese yen you get for selling one unit of base currency, which is USD. Cost of sales, or applications installed within 119.68, while 119.75 is offered. In this exemplary currency quotation dealer wants to sell one US dollar for 119.68 Japanese yen. At the same time, too, the dealer is willing to buy one US dollar for 119.75 Japanese yen.
Other important concepts in foreign exchange transactions, which you should be familiar with – it is "spread" and "Peep". The spread refers to the difference between the sales price or the bid request and cost. Pipes are tiny pieces 0,01. In our example, USD / JPY 119,68 / 75, mentioned previously, the spread of 7 points. Among currencies, which are commonly used in trade, small droplets. Extension of the powder is also possible due to intense competition. Small spread is also not automatically proportional to the losses or profits.
In Forex trading currency of the Group is considered as a "large", namely the US dollar, Japanese yen, euro, British pound, Swiss franc, Canadian dollar and Australian dollar. Meanwhile, the US Dollar / Japanese Yen (USD / JPY), Euro / US Dollar (EUR / USD), British Pound / US Dollar (GBP / USD) and US Dollar / Swiss Franc (USD / CHF) with a & # 39 are four most actively traded currency pairs. Usually the dealers prefer trading with the help of large, as these currencies are also a number of high liquidity.
When understanding the currency price must take into account a number of factors, such as economic and political issues of the country. Issues such as political stability and inflation, will have a big impact on currency prices.