Forex currency pairs are quoted in relationship to each other, so the value of one currency is reflected thru out the value of the another currency.
example the exchange rate quote between USD/CAD = 1.0381 at the writing of this article.
USD/CAD is called a currency pair ;. the currency to the left of the slash (/) is the base currency ; the currency on thr right of the slash (/) is the quote currency. Base currencies are always equal to one (1) unit in the other currency. This simply means 1 US dollar will buy 1.0381 Canadian dollar. All currency pairs are created and traded in financial markets using these same basic techniques on a world wide basis
Most currency pairs are traded against the US dollar and most frequently the US dollar is the base currency in the pair..In the market place this is called a direct quote
.
Other base currencies are the British pound, Australian dollar, New Zealand dollar and the Euro dollar.These Base currencies are traded against the US dollar.
example euro/usd where the euro is the base currency. In this case the US dollar is the quote currency and the exchange rate is refered to as indirect quote.. As of this writing, 1 euro dollar is equivalent to 1.3490 US dollar.. In general all exchange rates are quoted out to 4 digits; example 1 euro dollar = 1.3490 usd
Bid -Ask Tidbits For Forex
As with all financial markets when forex currency pairs are traded Bid prices for buying and Ask prices for selling are how the market works. The buying and selling of these currency pairs are in relationship to the base currency Buying a currency pair is going long.. Selling a currency pair is going short
example usd/cad = 1.0381 bid=1.0381 and ask = 1.0386. Buying the usd/cad dollar means you will be looking to see how much the market will charge for 1 us dollar. In this case you would pay the asking price of 1.0386 cad dollar for 1 us dollar..This same pair usd/cad can be sold for bid price of 1.0381.
.
Spreads – Pips Tidbits For Forex
The difference between Bid price and Ask price are called the spreads.. In the usd/cad examples above the spread is 1.0386 – 1.0386 = 0.0005 or 5 pips. Pip is the smallest unit/amount that prices can move up or down in any currency quote.
In the US dollar ,British pound, Swiss franc and Euro dollar one (1 ) pip = 0.0001 … In japanese yen 1 pip = .01
Most currency pairs trade within a trading range of 150 – 200 pips per day.
example the exchange rate quote between USD/CAD = 1.0381 at the writing of this article.
USD/CAD is called a currency pair ;. the currency to the left of the slash (/) is the base currency ; the currency on thr right of the slash (/) is the quote currency. Base currencies are always equal to one (1) unit in the other currency. This simply means 1 US dollar will buy 1.0381 Canadian dollar. All currency pairs are created and traded in financial markets using these same basic techniques on a world wide basis
Most currency pairs are traded against the US dollar and most frequently the US dollar is the base currency in the pair..In the market place this is called a direct quote
.
Other base currencies are the British pound, Australian dollar, New Zealand dollar and the Euro dollar.These Base currencies are traded against the US dollar.
example euro/usd where the euro is the base currency. In this case the US dollar is the quote currency and the exchange rate is refered to as indirect quote.. As of this writing, 1 euro dollar is equivalent to 1.3490 US dollar.. In general all exchange rates are quoted out to 4 digits; example 1 euro dollar = 1.3490 usd
Bid -Ask Tidbits For Forex
As with all financial markets when forex currency pairs are traded Bid prices for buying and Ask prices for selling are how the market works. The buying and selling of these currency pairs are in relationship to the base currency Buying a currency pair is going long.. Selling a currency pair is going short
example usd/cad = 1.0381 bid=1.0381 and ask = 1.0386. Buying the usd/cad dollar means you will be looking to see how much the market will charge for 1 us dollar. In this case you would pay the asking price of 1.0386 cad dollar for 1 us dollar..This same pair usd/cad can be sold for bid price of 1.0381.
.
Spreads – Pips Tidbits For Forex
The difference between Bid price and Ask price are called the spreads.. In the usd/cad examples above the spread is 1.0386 – 1.0386 = 0.0005 or 5 pips. Pip is the smallest unit/amount that prices can move up or down in any currency quote.
In the US dollar ,British pound, Swiss franc and Euro dollar one (1 ) pip = 0.0001 … In japanese yen 1 pip = .01
Most currency pairs trade within a trading range of 150 – 200 pips per day.
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