The price of any
currency is always versus anther currency - for example the US Dollar versus
the Euro. The two currencies in the quote are known as a pair which consists of
a 'base' currency and a 'counter' currency. In a quote of USD/EUR (US Dollar to
Euro) the 'base' currency .
Like the broker who
changes my Indian Rupee to UAE Dhirams, I too trade on the Forex market on my
own - all it required was to open an account with a Forex broker. I selected
one from ForexSQ and have been trading since then. However, Forex trading is
different from exchanging money at the Foreign Exchange outlets. There is much
more to Forex trading than just exchanging one currency for another. The two
currencies that have the highest trading volume on the Forex market are the US
Dollar .
The price of any
currency is always versus anther currency - for example the US Dollar versus
the Euro. The two currencies in the quote are known as a pair which consists of
a 'base' currency and a 'counter' currency. In a quote of USD/EUR (US Dollar to
Euro) the 'base' currency is USD and the 'counter' currency is EUR. So buying
and selling a currency pair is based on whether you think the base currency
will appreciate or depreciate against the counter currency. One interesting
aspect.
Actually, there are
three ways in which individuals, corporate and institutions trade Forex - the
spot market, the forwards market and the futures market. The spot market
witnesses the largest quantum of trades - that is because both the futures and
forward markets are based on the underlying real asset i.e. the spot market.
However, this was not always the case. The futures market was more favored in
the past because it was available for a longer period of time for individual
investors. But, no
