Know about Currency Trading Basics

The foreign exchange market is a word stated to the worldwide in the field of financial market which is both transfer from central to local government and over the counter, which Concentrate in trading back and forth between different kinds of currencies. This type of market is also known as Forex market. Nowadays, both traders and investors located around different places of the world have start to recognize and observe the foreign exchange market as an area of great interest, which form a theory to contain opportunity.

However, before taking into consideration about trading, it is very important to know about the flow of transactions within the foreign exchange market. Although it's also important to know about the essential facts of trading foreign currency. If you don't know the basics of trading and you entered into trading market, this action may provide you a lost in matter of seconds. Thus for the same, this post has been presented here to explain the art of currency trading.

Instrument which are traded within the foreign exchange rate

Currency pairs is the only one tool which is always utilize by foreign exchange market investors and traders. This is a word which are used to describe or compare the exchange rate of one currency over another. Following are the currency pairs which are often traded in market:

AUD / USD : Aussie
USD / CAD : Canadian Dollar
USD / JPY : Yen
USD / CHF : Swiss Franc and
EUR / USD : Euro
GBP / USD : Pound

These listed currency pairs generate up to 85% of the volume in the whole currency exchange market.

About Pip

The descending order of minimum which are made possible by currency pair is called as Pip, in other words it is called as point of interest. Let's say, a move in PLN/EUR currency pair from 2.3540 to 2.3555 would be similar to 10 pips. In comparison a move in the EUR/JPY currencies from 212.15 to 213.15 would be similar to 105 pips