How to Buy and Sell Currencies

How to Buy and Sell Currencies

All transactions made on the forex market involve the simultaneous purchasing and selling of two currencies.

These are called ‘currency pairs’, and include a base currency and a quote currency.

Currency Pairs

As mentioned earlier, forex trading is the simultaneous buying of one currency and selling another.

Currencies are traded in pairs.

For example, the Australian dollar and the U.S. dollar (AUD/USD) or the Swiss Franc and the Japanese yen (CHF/JPY).

When you trade in the forex market, you buy or sell in currency pairs.

The Majors

The most frequently traded currency pairs are the “Majors” or the major currency pairs.

All forex trades involve two currencies because you’re betting on the value of a currency against another.

Think of EUR/USD, the most-traded currency pair in the world. EUR, the first currency in the pair, is the base, and USD, the second, is the counter. buy forex signals

Forex Liquidity And Volatility

When you see a price quoted on your platform, that price is how much one euro is worth in US dollars.

You always see two prices because one is the buy price and one is the sell.

The difference between the two is the spread.

What is the bid / ask spread?

When you click “Buy” or “Sell”, you are buying or selling the first currency in the pair.

For example, if you think the euro will increase in value against the US dollar., you would trade the EUR/USD currency pair.

Since the euro is the first currency (the base currency), and you think it will go up, you buy EUR/USD.

If you think the euro will drop in value against the US dollar, you sell EUR/USD.

If the EUR/USD buy price is 1.1150 and the sell price is 1.1148, then the spread is 2 pips.

If the trade moves in your favor (or against you), then, once you cover the spread, you could make a profit (or loss) on your trade.

Beginner’s Guide for Trading USDJPY

Pips are the units used to measure movement in a forex pair.

A forex pip usually refers to a movement in the fourth decimal place of a currency pair.

How to Buy and Sell Currencies

Telegram Forex Signals – These currency pairs typically have low volatility and high liquidity and account for nearly 80% of the trade volume on the forex market.

Trading Gold in 2023 Gold Signals

There are seven major currency pairs and they all contain the U.S. dollar (USD) on one side.

CURRENCY PAIR	COUNTRIES	FX GEEK SPEAK
EUR/USD	Eurozone / United States	“euro dollar”
USD/JPY	United States / Japan	“dollar yen”
GBP/USD	United Kingdom / United States	“pound dollar”
USD/CHF	United States/ Switzerland	“dollar swissy”
USD/CAD	United States / Canada	“dollar loonie”
AUD/USD	Australia / United States	“aussie dollar”
NZD/USD	New Zealand / United States	“kiwi dollar”