Foreign Exchange and Forex Trading
The foreign exchange market, also known as "forex" or "fx" market, is the largest financial market in the world, with a daily trading volume of 3.2 trillion US dollars.
"Forex trading" refers to buying one currency while simultaneously selling another currency.
Each currency has an internationally unified symbol, such as USD (US Dollar), EUR (Euro), GBP (British Pound), AUD (Australian Dollar), JPY (Japanese Yen), CHF (Swiss Franc), NZD (New Zealand Dollar).
Forex is traded in currency pairs, for example: Euro / US Dollar (EUR/USD) or US Dollar / Japanese Yen (USD/JPY).
For beginners, it may seem difficult to understand a forex trading quote, but actually, by mastering two basic points, interpreting quotes can become very convenient. 1) The first currency is the base currency. 2) The value of the base currency is always in units of 1. For example, US Dollar / Japanese Yen 120.01. In this quote, the US Dollar is the base currency. US Dollar / Japanese Yen 120.01 means that 1 US Dollar equals 120.01 Japanese Yen. Whether buying or selling, the transaction is always on the base currency.
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