Forex Lessons – Learn The Forex
In order to learn the Forex you need to first have a clear understanding of what it is. Forex stands for Foreign Exchange. It is a trading platform whereby a selection of currencies throughout the world is traded.
To learn the Forex it helps to know what currencies stand for what. The currency used in the United States is the US dollar which on the Forex trading market is abbreviated to USD. The Euro is the currency in Europe and is written as EUR. To learn Forex you need to learn these abbreviations. Other necessary ones to learn include:
· Pound- GBP
· Canadian dollar- CAD
· Yen- JPY
· Aussie- AUD
· Swiss franc- CHF
To learn Forex as a beginner you need to start at the beginning with the basics. What are traded in the forex market are currency pairs. People who trade currency pairs are traders and investors. A currency pair for those who wish to learn forex is simply just the exchange rate of one currency over another type of currency. For example, a trader might decide to buy a Euro while at the same time sell in the American currency. This would be expressed as an equation of sorts and would look like this- EUR/USD. To learn the Forex you must learn the relevant lingo. This is also sometimes referred to as “going long”.
When you learn the Forex you need to be taught which pairs are traded the most often. These include EUR/USD (as previously mentioned in the last paragraph), GBP/USD, USD/CAD, USD/JPY, USD/CHF and AUD/USD.
In learning forex you will quickly discover that these aforementioned currency pairs make up the greatest volume on the market. In fact they make up 85 percent of the whole.
If you want to learn the Forex then a concrete example would come in handy. If a trader or investor decides to go long on the Euro (trader speak for purchase the Euro) then according to the currency pair EUR/USD he is not just buying the Euro but he is, at the same time, selling the US dollar. The same trader can also go short (this is another learn forex term that you need to acquaint yourself with that means sell a currency) on for example, the Aussie and simultaneously purchase the US dollar.
In order to learn the Forex you must become familiar with a variety of terms. Returning to the concept of a currency pair, the first currency is known as the base currency while the second is called the counter currency (or the quote currency). Therefore when you learn forex you will decipher the fact that when it comes to the equation of EUR/USD, the base currency is EUR while the counter currency is USD.
