INFO » currency trading. But if you don’t

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As the economy goes through its twists and turns, more and more people are turning towards currency trading as a way to make more money. But before you jump off that bridge, it is very important that you understand the basics of currency trading.


The first thing you need to understand is what is traded on the forex market. Currency pairs are the instruments traded on the forex market. Some of the most common currency pairs include the Euro and the U.S Dollar (EURUSD) Jeremy Toljan Jersey , the Pound and the U.S Dollar (GBPUSD), the Canadian Dollar and the U.S Dollar (USDCAD) and the Yen and the U.S Dollar (USDJPY).


The first currency listed in the pair is the base currency and the other currency is referred to as the quote currency. Let’s use the EURUSD currency pair for an example. If the price of the EURUSD 1.3435, that means it will cost 1.3435 U.S Dollars to get one EUR.


Next you will need to understand bid price and ask price. The bid price is the price at which your broker is willing to buy. This is the price a trader would sell at and it will always be lower than the ask price. The ask price is just the opposite. It is the price at which your broker is willing to sell and the price at which a trader should buy.


The last thing we will discuss in this article on the basics of Forex trading are pips. I am sure you have heard this word thrown around a lot but you might not really know what it is. First of all the word pip stands for price interest point. By definition Jadon Sancho Jersey , a pip is the minimum incremental move a currency pair can make.


For example, if the EURUSD moved from 1.3435 to 1.3455 that would equal 20 pips. You get that by subtracting the first number from the second number.


Of course there are many other things you will need to learn about currency market trading before you get started. Some of those things include margin calls and margin trading. They both fall under the basics of currency trading category. I would suggest you learn as much as you can before you decide to start trading.


Yes, you can truly make a lot of money with currency trading. But if you don’t know what you are doing you could lose everything you have. So take the time to learn the basics first so you can be among the few really successful traders out there.


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