Currency trading is the most liquid and robust market in the world. No market is comparable to the immense value of it, exploited en masse. The value of the foreign exchange market is estimated at nearly $ 5 billion a day, a figure that far exceeds the value of securities market transactions around the world.
The basis of currency trading
When we operate with currency pairs, we buy one and sell the other. Let's look at this example to illustrate how it works: EUR / USD is an often traded currency pair. The euro is the symbol of the euro and the US dollar, the US dollar. In this pair, we consider the base currency EUR and the quotation currency USD.
The pair is considered as an individual unit, although it consists of two different currencies. In other words, we operate with the EUR / USD currency pair, not the EUR or USD.
Let's clarify this example of trading by adding some numbers. If we use the EUR / USD at 1.25345, this means that every 1 € = 1.25 $. In other words, the euro is stronger than the dollar, or it takes more dollars to buy euros.
Some basic terms in Forex trading
Main pair
When trading with currency pairs, six pairs are considered important in daily trading: GBP / USD, USD / CHF, USD / JPY, AUD / USD and EUR / USD. They are the most frequently exploited pairs in the world and they are also the ones most likely to experience greater volatility. By operating with larger currency pairs, AvaTrade guarantees low margins, as well as a reason to operate with us.
Pair of minor currencies
On the other hand, smaller pairs are those that work less than older ones. They are less liquid than larger pairs and offer higher spreads. In general, the smaller pairs are the pairs that are not among those listed above. At AvaTrade we have a wide variety of smaller currency pairs to exploit.
Pair of exotic currencies
Normally exotic currency pairs include the currency of a country considered as an emerging market. The reason they are called exotic is not related to the location of the country, but to the additional challenges associated with trading these currency pairs. They are generally not very liquid, with larger gaps and fewer markets. The South African rand (ZAR), the Hong Kong dollar (HKD) and the Mexican peso (MXN) are examples of exotic currency pairs.
Now that we explain forex trading, you can open a Forex account to start trading with your largest, smallest, or most exotic currency pair.
It is only necessary to choose your trading platform to start trading.
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In my early trading I hired a man named Adriano Aaron Caruso, currently an expert designer in automatic services for exotic pairs, was interested in learning about the weak currencies and social areas that constantly influence their value, has extensive knowledge on markets such as RUB and NOK that were learned in Russia and Norway respectively that led to him being sought by recognised companies around the world but he decided to refuse because he was focused on an idea alternative to work and be recognized.
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