International exchange market (Currency exchange) — is the exchange, where operations on purchase and sale of currency take place between participants of the Forex market;
Forex pip (point) – is the minimum change of price of currency rate
Currency operations – contracts of participants of currency market on purchase and sale and settlement, conversion operations etc.;
Currency rate (currency quote) — the price of currency unit of one country expressed in currency unit of another country.
Types of Forex quotes:
- Direct quote – shows the amount of US dollars contained in national currency unit;
- Indirect quote – shows the amount of national currency contained in one US dollar;
- Cross rate – currency units of one country expressed in currency units of another country;
- EUR – United European currency
- USD – US dollar
- GBP – British pound of sterling
- CHF – Swiss Frank
- JPY – Japanese Yen
- AUD – Australian Dollar
- NZD – New Zealand Dollar
- CAD – Canadian Dollar
Currency pair is the name of text symbols of currency.
For example, EUR/USD = 1.2880
EUR – is the base currency (traded currency)
USD – quoted currency
Base currency (traded) is always put the left.
Quoted currency is always the second
Main currencies traded on the market
EUR/USD – European currency to US dollar
GBP/USD – British pound of sterling to US dollar
USD/JPY - US dollar to Swiss Frank
EUR/CHF – European currency to Swiss Frank
USD/CHF - US dollar to Swiss Frank
GBP/JPY - British pound of sterling to Japanese Yen
GBP/CHF - British pound of sterling to Swiss Frank
EUR/GBP - European currency to British pound of sterling
EUR/JPY - European currency to Japanese Yen
AUS/USD - Australian Dollar to US dollar
USD/CAD - US dollar to Canadian Dollar
All speculations made by a trader are always conducted with base currency. Thus, buying EUR/USD, you buy Euro for US dollars.
Spread – is the difference between price of purchase (Ask) and price of sale (Bid)
Cost of one point depends on volume of your trade and is equal:
Volume of trade multiplied into minimum change of price = cost of point
Open position – is the trade for purchase/sale, which is not closed and is present on market.
Credit leverage – is the relation of borrowed capital to trader's own funds.
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