Foreign Exchange Trading Made Easy
What are you buying?: Nothing is physically exchanged in foreign currency trading as all trades are conducted via computer entry and netted depending on market price. The market is purely speculative. The main reason for the market's existence is to assist conversion from one currency to the other for International Businesses in need of regular currency trades.
Difference in markets: In terms of futures, options and stocks you trade on a regulated and formal exchanges. Currency trade take place over-the-counter, thus trades are not regulated as strictly as on formal exchanges. No clearing houses are involved meaning that trades are not guaranteed. A credit agreement is the only binding agreement between members.
Top currency pairs: International liquid currency pairs are the preferred choice with some traders trading in exotic currency's such as Czech Koruna's just to be different and a little reckless. The most liquid and popular trade pairs are Dollar/Yen, Euro/US Dollar, US Dollar/Swiss Franc and British Pound/US Dollar. Variation pairs are also available such as New Zealand Dollar, Australian Dollar/US Dollar and US Dollar/Canadian Dollar.
Special terms: Special terms are used by currency traders to refer to specific foreign exchange events or items such as Swissies being Swiss Franc's, Sterling referring to British Pounds, Yards are one billion units and Figures are round numbers such as 60.
Movement terms: The term "tick" is a small time lapse between to currencies specifically trade time lapses. "Pips" are small movements in currency pricing. Pips are used to determine how much or little gain has been made. Just a couple of pips can result extreme price fluctuations. The size account determines the pip value. The pip difference between bid and asking price is known as spread. - 23162
Difference in markets: In terms of futures, options and stocks you trade on a regulated and formal exchanges. Currency trade take place over-the-counter, thus trades are not regulated as strictly as on formal exchanges. No clearing houses are involved meaning that trades are not guaranteed. A credit agreement is the only binding agreement between members.
Top currency pairs: International liquid currency pairs are the preferred choice with some traders trading in exotic currency's such as Czech Koruna's just to be different and a little reckless. The most liquid and popular trade pairs are Dollar/Yen, Euro/US Dollar, US Dollar/Swiss Franc and British Pound/US Dollar. Variation pairs are also available such as New Zealand Dollar, Australian Dollar/US Dollar and US Dollar/Canadian Dollar.
Special terms: Special terms are used by currency traders to refer to specific foreign exchange events or items such as Swissies being Swiss Franc's, Sterling referring to British Pounds, Yards are one billion units and Figures are round numbers such as 60.
Movement terms: The term "tick" is a small time lapse between to currencies specifically trade time lapses. "Pips" are small movements in currency pricing. Pips are used to determine how much or little gain has been made. Just a couple of pips can result extreme price fluctuations. The size account determines the pip value. The pip difference between bid and asking price is known as spread. - 23162
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posted by X - Men @ 5:37 AM
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