Forex or Foreign Exchange , Quite simply, it's a Global Market that allows you to trade two Currencies against each other . For example : If you ever traveled to another country, you usually have to find a Currency Exchange Booth at the airport, and then exchange the money you have in your wallet into the currency of the country you are visiting. You go up to the exchange counter and you notice a screen displaying different exchange rates for different currencies. You find United States Dollar (USD) and you notice that if you wanna get a Dollar you must have at least 75 Rupees. That means the value of USD in India is above 75 Rupees. Then you Exchange the Currency for another and you automatically participated in the Forex Market !
What is Currency Pair? A Currency Pair is a price quote of the exchange rate for two different currencies traded in the foreign exchange market. For example : US Dollar and Canadian Dollar (USD/CAD) or New Zealand Dollar and Australian Dollar (NZD/AUD). Forex Trading is a simultaneous buying of one currency and selling another. When you trade in Forex Market, you buy or sell in currency pairs. Each currency in the pair is listed as a three-letter code. The first two letters identify the name of the Country and the third letter identifies the name of that country's currency (usually the first letter of the currency's name). For Example : " USD" stands for US Dollar and " CAD" stands for Canadian Dollar. Base Currency and Quote Currency In the USD/CAD pair, you are buying the US Dollar and selling the Canadian Dollar. The first Currency (USD) listed in the pair is called Base Currency and the second (CAD) is called Quote Currency. The Quote ...