What is Forex? The basics in forex
What is traded in Forex???
Well, it's money. The easiest and the well defined answer is money. Let's see it this way,
You buy a share in a particular country. This is similar to buying currency in Forex. Think if you buy USD , you are basically buying a share in United States. When you think it's time to make some profit by selling the shares, you will end up with a profit.
Major currencies
As you can see, in all the currency symbols, there are always 3 letters. The first two letters stands for the country and the last letter stands for the currency.
For an example, in USD, US stands for United states and D stands for Dollar.
The above stated currencies are named as Majors because they are the most widely traded ones.
Major currency pairs
The currency pairs which include USD in one side are named as Major Currency Pairs.
For example:
- EUR/USD
- USD/JPY
- AUD/USD
Major cross-currency pairs
The currency pairs does not contain USD in one side are named 'Crosses or Minors'.
Other than USD, the most actively traded currencies are EUR, JPY and GBP.
Euro crosses
- EUR/CHF
- EUR/GBP
- EUR/CAD
- EUR/AUD
- EUR/NZD
Yen crosses
- EUR/JPY
- GBP/JPY
- CHF/JPY
- CAD/JPY
- AUD/JPY
- NZD/JPY
Pound crosses
- GBP/CHF
- GBP/AUD
- GBP/CAD
- GBP/NZD
Exoitic currency pairs
They are made up of one major currency paired with the currency of an emerging country such as Brazil, Mexico.
Hope you learnt something
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