What is a Forex Currency Pair
What is a Forex Currency in General
Currencies (like USD or EUR) in the Forex Market are traded in pairs and that means you trade one currency against for another. Therefore, Forex currencies are always quoted in terms of their price against another currency (ie USD/EUR).
Base / Quote Currency
The first currency in a quote is called the base currency and the second is called the quote currency or the counter. That means that in EUR/USD, the EUR is the base and the USD is the quote.
The Major Forex pairs are:
1) EUR/USD, 2) GBP/USD, 3) USD/JPY, 4) AUD/USD, 5) USD/CAD and 6) USD/CHF
MORE CURRENCY DEFINITIONS
What are the Currency Symbols?
Currency Symbols are indicating particular currencies, for example, EUR for Euro or AUD for Australian Dollar.
What is Currency Conversion?
In the Forex market, currency exchange is simply the exchange of one currency for another.
What is Currency Option?
Currency options are contracts to buy or sell one currency for another at an agreed quote and within a predefined period of time.
What is the Currency Rate
A currency rate is the price rate of a particular currency against another particular currency.
What is a Currency Forecast
It is the prediction of a future currency movement.
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◘ What is a Forex Currency Pair
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What is a Forex Account?
What is a Forex Trading Account?
A Forex Trading Account is an account owned by a person or by a legal entity (company) which it is used in order to trade and hold foreign currencies. That means that you deposit money on your local currency and use them to trade other currencies. You can buy or you can sell a currency at the current price and speculate towards future market developments and conditions. Generally speaking, a Forex Trading Account is working as a common bank account.
If you start trading currencies, the total value of your account will fluctuate according to the sum of your trading positions. At any given time your account holds:
(1) Your Trading Positions
(2) Your Unused Funds (cash)
Forex Account FAQ Questions
Here are some common questions and answres regarding opening a new Forex Account
Who can open a trading account?
- Anyone can open a trading account as long as his country is not excluded from the Forex Broker’s policy. US traders for example are accepted by only a few Forex Brokers, because of the strict online trading US legislation after 2008.
What is the minimum amount of deposit required?
- Usually, the minimum deposit is about $100-$500. If you are a beginner, make sure your broker offers a mini-lot account so that you will be able to trade small currency sizes.
How can a Forex account be funded?
- The most popular fund methods are supported by most brokers including Debit / Credit Cards, Bank Wire, MoneyBookers, and Paypal.
Will I pay Deposit or Withdrawal Commissions?
- No broker charges deposit commissions but some brokers (about 1/3) are charging withdrawal commissions. You can use the Live Chat support to learn about any broker’s fund policy.
How a Forex Broker is paid?
A Forex brokerage company can make profits:
1. by charging a spread between the bid & ask price,
2. by charging trading commissions (usually $15-$30 per 100,000 USD).
