In FX or Forex, one sells or purchase currencies. Place a transaction on the forex market is simple: the mechanics of an operation is very similar to those found in other markets such as stock market, so if you have previous experience in another market, it will be even easier to learn .
The goal in Forex is to exchange one currency for another, with the expectation that the price will change, hoping that the price of one currency purchased to appreciate with respect to which it sold.
The exchange rate is simply the radius value of one currency against another currency. For example the exchange rate USD / CHF indicates how many dollars can purchase one Swiss franc, or how many Swiss francs deal to buy a dollar.
How to Interpret the currency prices
The currencies are always priced in pairs, as GBP / USD or USD / JPY. The reason is that each transaction in forex, one is simultaneously buying one currency and selling another. An example of a foreign exchange between sterling and the dollar.
GBP / USD = 1.7500
The first currency to the left is called the base currency, in this case GBP. While the second currency to the right is called the quote currency. In this case the U.S. dollar.
When we buy, the exchange rate tells us how much we pay in units of the quote currency to buy one unit of base currency. In the example above, one would have to pay $ 1.75 to buy 1.0 pounds sterling. When we sell, exchange rate indicates how many units you get the quote currency when selling one unit of base currency. In the example above, you get $ 1.75 if sold 1.0 pound.
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The base currency indicates the direction to buy or sell. When you buy EURUSD, this simply means I'm buying the base currency (EUR) and simultaneously selling the quote currency (USD).
Buy one pair, for example EURUSD, if you think that the base currency will appreciate (go up) for the quote currency. One would sell the pair if you think that the base currency will depreciate (go down) with respect to the quote currency.
Long / Short
First, it is necessary to determine whether to buy or sell.
If you want to buy (which means buying the base currency and sell the quote currency), is expected to increase its base currency value and then sell it at a higher price. The terminology used by Forex brokers, is to indicate that I have a position 'long. " Remember: long = buy.
If you want to sell (which means sell the base currency and buy the quote currency), we expect the base currency loses value and then sell it at a lower price. This is known as being "short" position or have a "short". Remember: short = sell.
Bid / Ask Spread
All Forex quotes include two prices, the bid (offer) and ask (demand).
The bid is the price at which the broker is willing to buy the base currency in exchange for the quote currency. This means that the bid is the price that you, the investor can sell.
The ask is the price at which the broker is willing to sell the base currency in exchange for the quote currency. This means that the ask is the price with which you will buy. The difference between bid and ask is popularly known as the spread.
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- download mt4 indicator
- how to find supply and demand
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The goal in Forex is to exchange one currency for another, with the expectation that the price will change, hoping that the price of one currency purchased to appreciate with respect to which it sold.
The exchange rate is simply the radius value of one currency against another currency. For example the exchange rate USD / CHF indicates how many dollars can purchase one Swiss franc, or how many Swiss francs deal to buy a dollar.
How to Interpret the currency prices
The currencies are always priced in pairs, as GBP / USD or USD / JPY. The reason is that each transaction in forex, one is simultaneously buying one currency and selling another. An example of a foreign exchange between sterling and the dollar.
GBP / USD = 1.7500
The first currency to the left is called the base currency, in this case GBP. While the second currency to the right is called the quote currency. In this case the U.S. dollar.
When we buy, the exchange rate tells us how much we pay in units of the quote currency to buy one unit of base currency. In the example above, one would have to pay $ 1.75 to buy 1.0 pounds sterling. When we sell, exchange rate indicates how many units you get the quote currency when selling one unit of base currency. In the example above, you get $ 1.75 if sold 1.0 pound.
Back to top
The base currency indicates the direction to buy or sell. When you buy EURUSD, this simply means I'm buying the base currency (EUR) and simultaneously selling the quote currency (USD).
Buy one pair, for example EURUSD, if you think that the base currency will appreciate (go up) for the quote currency. One would sell the pair if you think that the base currency will depreciate (go down) with respect to the quote currency.
Long / Short
First, it is necessary to determine whether to buy or sell.
If you want to buy (which means buying the base currency and sell the quote currency), is expected to increase its base currency value and then sell it at a higher price. The terminology used by Forex brokers, is to indicate that I have a position 'long. " Remember: long = buy.
If you want to sell (which means sell the base currency and buy the quote currency), we expect the base currency loses value and then sell it at a lower price. This is known as being "short" position or have a "short". Remember: short = sell.
Bid / Ask Spread
All Forex quotes include two prices, the bid (offer) and ask (demand).
The bid is the price at which the broker is willing to buy the base currency in exchange for the quote currency. This means that the bid is the price that you, the investor can sell.
The ask is the price at which the broker is willing to sell the base currency in exchange for the quote currency. This means that the ask is the price with which you will buy. The difference between bid and ask is popularly known as the spread.
related posts
- zigzag indicator
- download mt4 indicator
- how to find supply and demand
- super signals
- divergence trading
Forex is simple follow the trend and you will rich.
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