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Forex Symbol
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Currency Pairs
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Spreads
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Forex Symbol
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Currency Pairs
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Spreads
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EUR/USD
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Euro / U.S. Dollar
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2 pips
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GBP/CHF
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British Pound / Swiss Franc
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8 pips
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USD/JPY
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U.S. Dollar / Japanese Yen
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3 pips
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CHF/JPY
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Swiss Franc / Japanese Yen
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9 pips
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GBP/USD
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British Pound / U.S. Dollar
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3 pips
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AUD/JPY
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Australian Dollar / Japanese Yen
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9 pips
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USD/CHF
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U.S. Dollar / Swiss Franc
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3 pips
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NZD/JPY
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New Zealand Dollar / Japanese Yen
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9 pips
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AUD/USD
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Australian Dollar / U.S. Dollar
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4 pips
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CAD/JPY
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Canadian Dollar / Japanese Yen
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9 pips
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NZD/USD
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New Zealand Dollar / U.S. Dollar
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4 pips
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EUR/CAD
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Euro / Canadian Dollar
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9 pips
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USD/CAD
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U.S. Dollar / Canadian Dollar
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4 pips
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AUD/CAD
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Australian Dollar / Canadian Dollar
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12 pips
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GBP/JPY
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British Pound / Japanese Yen
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5 pips
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AUD/NZD
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Australian Dollar / New Zealand Dollar
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12 pips
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EUR/JPY
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Euro / Japanese Yen
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5 pips
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EUR/AUD
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Euro / Australian Dollar
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12 pips
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EUR/GBP
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Euro / British Pound
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5 pips
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GBP/AUD
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British Pound / Australian Dollar
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12 pips
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EUR/CHF
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Euro / Swiss Franc
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7 pips
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Trading Expressions:
Leverage
A small amount of capital will allow you to control a large position because it will be multiplied a number of times. A common leverage is between 50:1 to 100:1, so if you have an account with USD$1000 in it, and it was leveraged 100:1, you would be able to trade up to USD$100,000
It is used to increase buying/selling power because the market shifts in a given day are often very small, typically only around 1%, so it is necessary to trade large sums of money to make any substantial profits. i.e.
1 cent * 1000$ = 1000 cents or 10$
100:1 of leverage applied:
1 cent * (1000$ * 100) = 100.000 cents or 1000$
Margin
Margin is minimum required to make a trade (i.e. if you want to trade $100,000 and your leverage is 100:1, you need to put up only $1000
In trading stocks, you need to put up least 50% of price of stocks, the rest of the money is borrowed and interest is paid back on the money that is borrowed.
In trading Forex, you only need to put up 1% of trade size and the rest of money will be covered by taking 100:1 of leverage.
Pips
Pips are the smallest unit in a currency quote or 1/100th of 1%, which is 4 decimal places out in all currencies except for the JPY.
In EUR/USD, a 3 pip spread would be from 1.2500 to 1.2503
In JPY, a pip is only taken out to 2 decimal places (i.e. 3 pips would be 114.00 to 114.03)
Mini/ Micro Accounts
These types of trading accounts will give you the opportunity to trade smaller sizes. The advantages of trading via Mini / Micro accounts are:
Smaller amount of money, good for starters, test skills, get experience
Mini accounts give you the opportunity to trade as little as 10.000$.
Micro accounts give you the opportunity to trade as little as 1000$.
Types of Orders
Market Order: Order placed to enter or exit the market at the market price, either bid/sell price or ask/buy price
Limit Order: Order placed to enter the market at an exact placed price or better with no slippage
Stop Order: Order placed to enter the market at an exact price that turns into a market order when that price is reached
A buy order above the current market price is a buy-stop order
A buy order below the current market price is a buy-limit order
A sell order above the current market price is a sell-limit order
Asell order below the current market price is asell-stop order
Factors Affecting the Currency Market
Currency prices are affected by a variety of factors. Supply and demand factors are constantly shifting, and the price of one currency in relation to another shifts accordingly. No other market in the world would be affected like Forex market in case of an event.
Supply and demand for any given currency, and thus its value, are not influenced by any single element, but rather by several. These elements generally fall into three categories:
Economic factors These include economic policy, disseminated by government agencies and central banks, economic conditions, generally revealed through economic reports, and other economic indicators.
Economic policy: comprises government fiscal policy (budget/spending practices) and monetary policy (the means by which a government's central bank influences the supply and "cost" of money, which is reflected by the level of interest rates).
Economic conditions include: Government budget deficits or surpluses, Balance of trade levels and trends, Inflation levels and trends, Economic growth and health.
Political conditions Internal, regional, and international political conditions and events can have a profound effect on currency markets. For instance, political upheaval and instability can have a negative impact on a nation's economy. The rise of a political faction that is perceived to be fiscally responsible can have the opposite effect. Also, events in one country in a region may spur positive or negative interest in a neighboring country and, in the process, affect its currency.
Market psychology Market psychology and trader perceptions influence the foreign exchange market in a variety of ways. For example, instability in regional and international markets can lead to a "flight to quality," with investors seeking a "safe haven". There will be a greater demand, thus a higher price, for currencies perceived as stronger over their relatively weaker counterparts.
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