New to Forex ?
If you are new to Forex, you should read our brief introduction below to learn the market basics.
Forex means nothing more than Foreign Exchange, the trade in foreign currencies. The Forex market is also known as the FX market. The Forex market is the place where currencies are bought and sold. The Forex market is open 24-hours a day, 5 days a week. The Forex market is based in four leading cities spread around the world:
- New York
The table below lists the most common currencies which are being traded in the Forex market. Behind every currency the correct abbreviation is given.
|Currency ||Abbreviation |
|US dollar ||USD |
|Euro ||EUR |
|British Pound ||GBP |
|Japanese Yen ||JPY |
|Swiss Franc ||CHF |
|Canadian dollar ||CAD |
|Singapore dollar ||SGD |
|New Zealand Dollar ||NZD |
Basics Forex trading
Foreign currencies are always traded in pairs. Example: (USD / EUR) (GBP / EUR) (JPY / USD) The first currency is called the 'base' currency, the second is called the 'counter' or 'quote' currency. When a pair is listed as: (EUR / USD) the Euro is the base currency and the US dollar is the counter currency.
The US dollar is a world leading currency, therefore it's listed as a base currency more than any other currency. Currencies are quoted in the following way:
This quotation means that 1 Euro can buy 1.4985 US dollar. If the base currency's value would rise in comparison with the counter value, one Euro could buy more US dollars. We call this an increasement of the quote. When the opposite would take place, it's what we call a decreasement of the quote.
Basic Forex terms
For people who are new to Forex we list some words of which you need to know the meaning before you start trading Forex.
- Pip or point
Pip means Percentage In Point (PIP) also known as point. A pip is a rate's minimum price increasement in Forex trading. A pip of 0.0001 is most common. Sometimes quotes are abbreviated to the last two digits. A quote of 1.3594/1.3345 then will be abbreviated to 94 / 45
- Ask price
The ask price is the price for which a particular currency can be bought. The ask price is the price for which the market is willing to sell the currency.
- Bid price
The bid price is the price for which a particular currency can be sold. The market is willing to pay this price for this currency.
The spread is nothing more than the difference between bid and ask. To figure out the spread, just calculate the difference between the bid and ask price.
- Currency rate
The rate of a particular currency valued against another currency rate.
New to Forex: join us
When you're new to Forex, we think that the brief information above actually is all you need to know to start your Forex adventure. On this website we listed and reviewed some of the best Forex brokers. All Forex brokers listed on this website offer some kind of beginner's guide. By following these guides for people who are new to Forex trading you'll learn how to trade Forex step-by-step. As soon as you get the hang of it you'll understand that with some effort almost everybody can trade Forex.
Join the Forex community