The right way to say that Every state has currency to run his day to day activities. These currencies bonk their particularized values and forex is the visitor which is merchandising and purchasing the currencies for the convinient of the users. The currency is valued that how some assets a countrry hump. Then the frugal steadiness of the respective land is also valued in the increment or amount of the nowness.
Best currency pair:
Although there is lots of currency pairs offered to Forex traders, if you are a beginner it is easier to start with major currency pairs:
EUR/USD
GBP/USD
USD/JPY
There are several good reasons for that:
1. These currency crosses are widely traded, thus providing liquidity which is needed in order to benefit from price changes.
2. They have tight spreads, except may be for GBP/USD, which most of the time receives higher spread quotation from Forex brokers as it is more volatile (e.g. has wider price ranges than other pairs).
3. They all are traded against US dollar, which automatically suggest that the most active trading hours would be during New York trading session – the session with the highest volume of trades.
4. And finally, there are many Forex trading systems that are developed for trading those pairs and can be found online.
What currency pairs to avoid?
Exotic and uncommon currency pairs should be avoided by novice Forex traders as some further knowledge is needed to trade such pairs successfully.
Here is the list of major currencies beginner traders should focus on:
Euro (EUR)
US Dollar (USD)
British Pound (GBP)
Swiss Franc (CHF)
Japanese Yen (JPY)
Australian Dollar (AUD)
Canadian Dollar (CAD)
Also novice Forex traders should try to avoid currency pairs which have high spreads. Spreads vary from broker to broker. The information about spreads can be found at brokers’ websites, or at the special column called “Spread” on the trading platform itself, or from the Ask/Bid table (found also on the trading platform) by subtracting Bid price from the Ask.
Here is an example:
On the screenshot we have USD/CHF spread = 3 (Ask – Bid = 0.9992-0.9989 = 3)
GBP/USD spread = 3
EUR/USD spread = 2
USD/JPY spread = 2
Currencies that have high spreads are more volatile, e.g. have wide price ranges and longer price spikes, which unprepared traders may find difficult to trade.
Also a common mistake done by many beginner traders is that they try to monitor too many currency pairs at once. Not only it makes trading hectic and more difficult to manage, it also prevents deeper analysis of the currency pairs and actually learning their “behavior” over the time.
Currency pairs do have their unique ways to move, react to economical events, form trends etc.
By studying one currency pair at the time, Forex traders have the ability to observe its behavior and learn the ways to trade the pair even more effectively.
Submitted by Beginner Trader on Thu, 12/18/2008 - 08:00.
how about explaining a pairs trade that might be a good start for a beginner.
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Submitted by Forex Tutor on Fri, 12/19/2008 - 09:49.
3 easiest pairs are: EUR/USD, USD/JPY and GBP/USD.
EUR/USD - most popular pair with the lowest spread. This pair is an ideal choice for beginners, since it responds quite well to basic technical studies and rules, which traders learn in the beginning. EUR/USD is not too volatile under normal market conditions and, thus, can be traded safely with lesser risks and closer stops.
From the fundamental point of view EUR/USD gets lots of global economic coverage, it is an easy to follow and monitor pair.
USD/JPY is another good currency pair. It often has the same low spread as EUR/USD, which makes it attractive to investors. USD/JPY pair features much smoother trends, comparing to other pairs; this makes trading USD/JPY during trends a real joy, not to mention the fact of earning profits alongside.
The behavior (trend) of USD/JPY pair can also easily be compared/verified with other /JPY pairs, for example, EUR/JPY, CAD/JPY or GBP/JPY.
GBP/USD - this currency pair likes large moves, it is able to bring more pips in one simple move than EUR/USD or USD/JPY. It is a pair often used for breakout trading. However, the risks here rise proportional to profit opportunities. GBP/USD requires further away placed stops. It belongs to volatile pairs group.
There is also plenty of market research and analysis available for GBP/USD, which makes it favorable among traders.
Every trading system would behave differently with different currency pairs. Stops, Profit levels, risks - everything should be calculated and tailored individually for each pair if you are looking to get the best performance out of each trade.
How to Trade
Now that you know some important factors to be aware of when opening a forex account, we will take a look at what exactly you can trade within that account. The two main ways to trade the currency market is the simple buying and selling of currency pairs, where you go long one currency and short another. The second way is through the purchasing of derivatives that track the movements of a specific currency pair. Both of these techniques are highly similar to techniques in the equities market. The most common way is to simply buy and sell currency pairs, much in the same way most individuals buy and sell stocks. In this case, you are hoping the value of the pair itself changes in a favorable manner. If you go long a currency pair, you are hoping that the value of the pair increases. For example, let's say that you took a long position in the USD/CAD pair - you will make money if the value of this pair goes up, and lose money if it falls. This pair rises when the U.S. dollar increases in value against the Canadian dollar, so it is a bet on the U.S. dollar. The other option is to use derivative products, such as options and futures, to profit from changes in the value of currencies. If you buy an option on a currency pair, you are gaining the right to purchase a currency pair at a set rate before a set point in time. A futures contract, on the other hand, creates the obligation to buy the currency at a set point in time. Both of these trading techniques are usually only used by more advanced traders, but it is important to at least be familiar with them
I do not think that all currencies are move as per resistance and support or even moved by this "indicator" influence. I prefer to believe that currencies move by its demand, supply and some expectation of traders who involve with them. S and R will always be a good "indicaor" of movement, but we should aware that they can not excactly move the price.Quote:
Originally Posted by Jack
currencies can be traded in automated way? Do you know that?
It's easy to do even for a newcomer on Forex. All you need to do is install MT4 platform and Forex expert advisor or Forex strategy. If you will be interested in that way of trading, visit Forexe a systems.
Alpha
Forex trading gives us a great opportunity to get on profits but this Alzima experience and training permanent in the forex market.
Forex market main aap kay liye trading karna currencies ki koi mushkil kaam naheen hay lakin successfully trade karna mushkil hay, aap ko apnee interest ki currencies main say koi bhi pair trade kar sakty ho jis kay barry main aap ko jankaree hay.
yes this good question i think that the most of the trader dont know a lot of currencies for me i never take 100$ currency and i dont know how it is but the eur i know little bit about it and about the movment of this currencies it all about the news and the traders and the central bank best of luck..........
Forex is all about buying and selling currency business as we see in this Forex market prices of all currency pairs are increasing or decreasing...
This a good question.I think that the most of the trader do not know lots of currencies for me i never take 100$ currency and i do not know how it is but the eur i know little bit about it and about the moment of this currencies it all about the news and the traders and the central bank.....
i think that the most of the trader dont know a lot of currencies for me i never take 100$ currency and i dont know how it is but the eur i know little bit about it and about the movment of this currencies it all about the news and the traders and the central bank.