THE INTERPRETATION OF FOREX RATE
The question 'what is forex we have in the last lesson of this course for beginners forex answered. In this lesson we will go for the first time in the practice of online forex trading. We will, later in the course, many things to explain on the basis of the software eToro forex broker. This is the easiest and best broker for novice traders. Note to self to look into the software, you can free download eToro forex software and installing (mac users can not use the direct download but act on eToro; mac users click here). This is free and takes only minutes.
Currency pairs
As in the previous lesson has been said, currencies are traded in pairs. Examples of currency pairs: euro dollar, pound dollar, yen U.S. dollars. That means you always speculates on the rise in one currency against another currency. Opening a forex position is nothing more than buying one currency and simultaneously sell a few of the other. This will earn you as the purchased currency rise in value against the currency sold.
A Forex currency pair is shown by the two abbreviations for the currencies concerned with a slash between them. Each currency has its own three-letter abbreviation. For the major currencies this as follows:
USD = U.S. Dollar CHF = Swiss Franc
EUR = Euro CAD = Canadian Dollar
JPY = Japanese Yen Australian Dollar AUD =
GBP = British Pound New Zealand Dollar NZD =
Thus, the currency pair GBP / USD combination British Pound - U.S. Dollar. The former acronym (here GBP) is also called the 'base currency' and is the currency in which you speculate. So if you GBP / USD buying, you expect an increase of the British Pound. The second abbreviation (USD here) is called the 'quote currency' and the currencies you speculate. The expected increase in the British Pound is in this case at the expense of the U.S. Dollar.
50 euro free markets
Incidentally, you will already have noticed that quite a few new terms come by. Like most activities also has the forex world its own jargon, pip, spread, bid, ask, long, short etc ... do not be deterred by these terms as you learn fast enough. It may seem a necessary evil, but on the other hand it is also very tough again if you at parties in the proper terms can inflict on your success on the forex market. For an explanation of all terms that you encounter, see the forex dictionary.
Rates and the spread
The eToro software you different currency pairs which you can act found by clicking the 'TRADE BOX' button. You'll get a list that looks like this (the specific numbers are a snapshot and will at the time that you try this yourself otherwise).
Behind every currency pair you see are two prizes: the 'Sell' and 'Buy' award. The USD / CAD is the Sell price eg 1.0279 and 1.0284 Buy price. The Sell price, also known as the 'bid price', is the price of Canadian Dollars you can sell to the market, denominated in U.S. Dollars. The Buy price, also called the 'ask price', is the price at which you can buy Canadian Dollars.
The difference between the bid and ask is called the spread. This is what you paid to the broker to open the position. Unlike other markets (such as stock and option trading) calculates the broker at no cost to you except the spread. This makes trading in Forex is also much cheaper for small investors than trading on the stock exchange.
You can see that the spread is very small; in the USD / CAD five hundredths of a cent. In the forex world says is also called: the spread is five 'pips'. A pip is the smallest unit which is included in the price and notations of most currency pairs the fourth decimal place. (Only the Japanese yen a pip the second decimal place, because Yens about a factor of one hundred are worth less than most major currencies.) The '+1' and' -1 'decimal Buy and Sell prices give Also the price difference from the last quoted price again in the number of pips.
Long / short
There are two different types of positions that can be opened, a long position and short position. In a long position you'd expect the price of the base currency to rise in comparison to the quote currency. If you have a long position on USD / CAD takes, it means that you buy U.S. Dollars and Canadian Dollars while selling. In a short position do you expect the price of the quote currency to rise in comparison to the base currency. In other words, you simultaneously buy and sell Canadian Dollars U.S. Dollars.
The idea of a short position for many new traders difficult to understand. In fact, you sell something you do not have. This is possible because you sold the currency not immediately have to deliver, it does only at the moment you close the position again. It's like someone selling a bag of apples, the apples without you possess. You know, however, that the apples take a while to the buyer have to deliver. You speculate that in the meantime the price of apples will have fallen, so you at the time of delivery, the apples can buy cheaper than what you have now got paid. How it works with currency also, you do not just sell apples, but for example Euros or Dollars.
To quickly get to grips you better make a few long and short trades by using the eToro software. Look what happened to the value of your position happens if the price rises or falls. You will notice that you have in no time by how long and short positions actually work.
related posts
- All Cci
- Mtf Macd
- Zigzag Indicators
- Codebase Mt4
- Grid Trading Forex
The question 'what is forex we have in the last lesson of this course for beginners forex answered. In this lesson we will go for the first time in the practice of online forex trading. We will, later in the course, many things to explain on the basis of the software eToro forex broker. This is the easiest and best broker for novice traders. Note to self to look into the software, you can free download eToro forex software and installing (mac users can not use the direct download but act on eToro; mac users click here). This is free and takes only minutes.
Currency pairs
As in the previous lesson has been said, currencies are traded in pairs. Examples of currency pairs: euro dollar, pound dollar, yen U.S. dollars. That means you always speculates on the rise in one currency against another currency. Opening a forex position is nothing more than buying one currency and simultaneously sell a few of the other. This will earn you as the purchased currency rise in value against the currency sold.
A Forex currency pair is shown by the two abbreviations for the currencies concerned with a slash between them. Each currency has its own three-letter abbreviation. For the major currencies this as follows:
USD = U.S. Dollar CHF = Swiss Franc
EUR = Euro CAD = Canadian Dollar
JPY = Japanese Yen Australian Dollar AUD =
GBP = British Pound New Zealand Dollar NZD =
Thus, the currency pair GBP / USD combination British Pound - U.S. Dollar. The former acronym (here GBP) is also called the 'base currency' and is the currency in which you speculate. So if you GBP / USD buying, you expect an increase of the British Pound. The second abbreviation (USD here) is called the 'quote currency' and the currencies you speculate. The expected increase in the British Pound is in this case at the expense of the U.S. Dollar.
50 euro free markets
Incidentally, you will already have noticed that quite a few new terms come by. Like most activities also has the forex world its own jargon, pip, spread, bid, ask, long, short etc ... do not be deterred by these terms as you learn fast enough. It may seem a necessary evil, but on the other hand it is also very tough again if you at parties in the proper terms can inflict on your success on the forex market. For an explanation of all terms that you encounter, see the forex dictionary.
Rates and the spread
The eToro software you different currency pairs which you can act found by clicking the 'TRADE BOX' button. You'll get a list that looks like this (the specific numbers are a snapshot and will at the time that you try this yourself otherwise).
Behind every currency pair you see are two prizes: the 'Sell' and 'Buy' award. The USD / CAD is the Sell price eg 1.0279 and 1.0284 Buy price. The Sell price, also known as the 'bid price', is the price of Canadian Dollars you can sell to the market, denominated in U.S. Dollars. The Buy price, also called the 'ask price', is the price at which you can buy Canadian Dollars.
The difference between the bid and ask is called the spread. This is what you paid to the broker to open the position. Unlike other markets (such as stock and option trading) calculates the broker at no cost to you except the spread. This makes trading in Forex is also much cheaper for small investors than trading on the stock exchange.
You can see that the spread is very small; in the USD / CAD five hundredths of a cent. In the forex world says is also called: the spread is five 'pips'. A pip is the smallest unit which is included in the price and notations of most currency pairs the fourth decimal place. (Only the Japanese yen a pip the second decimal place, because Yens about a factor of one hundred are worth less than most major currencies.) The '+1' and' -1 'decimal Buy and Sell prices give Also the price difference from the last quoted price again in the number of pips.
Long / short
There are two different types of positions that can be opened, a long position and short position. In a long position you'd expect the price of the base currency to rise in comparison to the quote currency. If you have a long position on USD / CAD takes, it means that you buy U.S. Dollars and Canadian Dollars while selling. In a short position do you expect the price of the quote currency to rise in comparison to the base currency. In other words, you simultaneously buy and sell Canadian Dollars U.S. Dollars.
The idea of a short position for many new traders difficult to understand. In fact, you sell something you do not have. This is possible because you sold the currency not immediately have to deliver, it does only at the moment you close the position again. It's like someone selling a bag of apples, the apples without you possess. You know, however, that the apples take a while to the buyer have to deliver. You speculate that in the meantime the price of apples will have fallen, so you at the time of delivery, the apples can buy cheaper than what you have now got paid. How it works with currency also, you do not just sell apples, but for example Euros or Dollars.
To quickly get to grips you better make a few long and short trades by using the eToro software. Look what happened to the value of your position happens if the price rises or falls. You will notice that you have in no time by how long and short positions actually work.
related posts
- All Cci
- Mtf Macd
- Zigzag Indicators
- Codebase Mt4
- Grid Trading Forex
Forex is simple follow the trend and you will rich.
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