What is the forex trading?

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What is the forex trading?

FOREX or currency trading, is a decentralized global market where all the world’s currencies trade. The forex market is the largest, most liquid market in the world with an average daily trading volume exceeding $7 trillion, What is the forex trading?
“Forex” stands for FX Exchange, and refers to the buying or selling of one currency and another. It’s traded market is the largest in the world because people, businesses, and countries all participate in it.
In the Forex market, currencies always trade in pairs. When you exchange US dollars for euros, there are two currencies involved. For every foreign exchange transaction, you must exchange one currencyfor another. This is why the forex market uses currency pairs, so you can see the cost of one currency relative to another. The EUR/USD price, for example, lets you know how many US dollars (USD) it takes to buy one euro (EUR).

What is the forex trading?

What is the forex trading? FxPremiere Group

How to Determine Proper Position Size When Forex Trading

The former scenario is more of a concern, as risking too much can evaporate a trading account quickly.

Your position size is how many lots (micro, mini or standard) you take on a trade. Your risk is broken down into two parts–trade risk and account risk. Here’s how all these elements fit together to give you the ideal position size, no matter what the market conditions are, what the trade setup is, or what strategy you’re using – What is the forex trading?

The Forex market uses symbols for currencies. The euro is symbolized by EUR, the US dollar is the USD. Other currency symbols are: Australian dollar=AUD, British pound=GBP, Swiss franc=CHF, Canadian dollar=CAD, New Zealand dollar=NZD and Japanese yen=JPY.
Each forex pair, EUR/USD, AUD/USD, USD/JPY for example, will have a market price associated with it. The price refers to how much of the second currency it takes to buy one unit of the first currency. If the price of the EUR/USD is 1.3635 it costs 1.3635 US dollars to buy one euro.

What is the forex trading?

What is the forex trading?

If you want to find out how many euros it costs to buy one U.S. dollar we need to flip the pair to USD/EUR. To find out this rate, divide 1 by 1.3635 (or whatever the current rate is). The result is 0.7334. It costs 0.7334 euros to buy one USD based on the current price. The price of the currency pair constantly fluctuates, as transactions occur around the globe, 24-hours a day during the week.

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Many currency pairs will move about 50 to 100 pips (sometimes more or less depending on overall market conditions) a day. A pip is the fourth decimal place in a currency pair, or the second decimal place when JPY is in the pair. When the price of the EURUSD moves from 1.3600 to 1.3650, that’s a 50 pip move; if you bought the pair at 1.3600 and sold it at 1.3650 you’d make a 50 pip profit. What is the forex trading?
The profit you made on the above theoretical trade depends on how much of the currency you purchased.

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How much each pip is worth is called the “pip value.” For any pair where the USD is listed second in the currency pair, the above mentioned pip values apply. If the USD is listed first, the pip value may be slightly different. To find the pip value of the USD/CHF for example, divide the normal pip value (mentioned above) by the current USD/CHF exchange rate. A micro lot is worth $0.10/0.9435 = $0.1060, where 0.9435 is the current price of the pair, and subject to change. For JPY pairs (USD/JPY), go through this same process, but then multiple by 100. For a more detailed explanation, see Calculating Pip Value for Different Forex Pairs and Account Currencies.

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