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Understanding the Forex currency pairs
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All currency trading is done in pairs. Unlike the stock market, where you can buy or sell a single stock, you have to buy one currency and sell another currency in theforex market.
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The major currency pairs traded in the Forex Market are the :
EUR/USD
GBP/USD
USD/JPY
AUD/USD
XAU/USD and the
XBR/USD
Knowing the characteristics of these currency pairs is very important for a trader to trade better and make profits. Here is an article that explains to you about this in detail.
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Understanding the Forex currency pairs
Many traders who begin with currency exchange are looking to make a profit from major currencies. An understanding of the relationship between two currencies helps to set expectations for profit and loss during a trade.
First, it becomes important to understand the dynamics of the pair- which currency is base and which counters.
The numbers make sense only after having set the correct relation. For instance the USD is almost always a 'base' currency. But, the GBP is a counter.
Next, a look at the exchange rate between the two is important.
There are basically three types of exchanged rates- fixed, adjustable, or floating.
After you put it all together, you will understand the importance of the currency market.Tags: None
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