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WHAT
IS
FOREX MARKET?
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WHAT IS FOREX?
Forex stands for foreign exchange. it’s also referred as FX or currency
market. This is a place where exchange of one currency can be done in
lieu of another such as buy US Dollar for Euro.
Buying and selling can be done for each currency pair. Trades can be
executed through a broker through a trading platform. 50 percent
transactions take place in US and UK market. Mostly traded currency is
US Dollar against different currencies all over the world.
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CHARACTERISTICS OF FOREX MARKET
World’s largest trading market
Works 24*5 starts on Monday in Sydney and ends on Friday in
New York
Daily turnover amounts to $6 trillion approximately
Almost 9/10th part of trades taking place are in speculation market
Most effective and liquid market
Participants – financial firms (Banks, Hedge funds, Mutual Funds)
Investors
Major markets – US, UK, Europe, Australia, Japan, Hong Kong,
Singapore
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Resource: Wikipedia
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SYMBOL COUNTRY CURRENCY
USD United States Dollar
EUR Euro zone members Euro
JPY Japan Yen
GBP Great Britain Pound
CHF Switzerland Franc
CAD Canada Dollar
AUD Australia Dollar
NZD New Zealand Dollar
CURRENCIES & SYMBOLS
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CURRENCY PAIRS & NICKNAMES
CURRENCY PAIR NICKNAME
EUR/USD Fiber
USD/JPY Yen
GBP/USD Cable
USD/CHF Swissy
USD/CAD Loonie
AUD/USD Aussie
NZD/USD Kiwi
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BASE CURRENCY AND QUOTE CURRENCY
EUR-USD
1.3345
BASE CURRENCY QUOTE CURRENCY
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ASK RATE & BID RATE
EUR-USD
1.33451.6690/1.6691
GBP-USD
BID RATE ASK RATE
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APPRECIATION
Price quoted against any pair talks about base currency
Chart goes up so as the base currency
E.g.
GBPUSD
1.6650
1.6640
Appreciation
(Pound Appreciated against US Dollar so as US Dollar depreciated against Pound)
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DEPRECIATION
Chart goes down so as the base currency
E.g.
EURUSD
1.3350
1.3340
Depreciation
(Euro depreciated against US Dollar so as US Dollar appreciated against Euro)
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MEASUREMENT
Pips and Big figures
Most of the currencies are traded in four digits after point(.) EURUSD-
1.3350
Japanese Yen is exception
Last two digits are pips and first two digits are big figures
E.g.
EUR USD1.3456
BIG FIGURES PIPS
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Thank You
