Monday, January 14

Currency Pairs

As stated earlier Forex trading is the simultaneous buying of one currency and selling the other. Currencies are therefore traded in pairs through a broker or dealer.
Example of currency pairs as represented symbolically include; AUD/USED, USD/CAD, EUR/USD, GBP/JPY..etc.
When you trade in the forex market, you buy or sell in currency pairs. Currency reacts based on which currency is stronger at the particular point in time.
Currency pairs could be classified into four viz
Major Currency Pairs,
Crosses Currency Pairs 
Other Pairs and
Exotic Pairs

 Major Currency Pairs
They are basically currency that contains the U.S. dollar (USD) on one side and are constantly traded in the Foreign Exchange Market. Most traders prefer them because of their size and liquidity in nature. In summary, they are majors widely traded currency pairs in the world.
Below is a table of major currency pairs;



Cross-Currency Pairs

These are simply currency pair that does not contain the U.S. dollar (USD).
The major crosses in this aspect are also called "the minors." The most traded crosses are derived from these three major;  JPY, EUR and GBP.
Let’s take a look at the crosses on after the other.

                                            YEN CROSSES


                                     Euro Crosses
 
Pound Cross

Hold the break. We are not done yet. Let’s take a look at some other major crosses too.                                                                

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Other Crosses

Exotic Pairs

Exotic pairs are a combination one major currency paired with the currency of an upcoming economy, like South Africa, Thailand, Brazil, or Singapore.
Examples of some exotic pairs are shown below;


You may be surprise to see some of these exotic currency pairs, but mostly, it depends on your broker.
It is good we let you know about them even if you need not trade them. Because the transaction costs related to these pairs are generally bigger.
The spreads could be twice or even trice bigger than the normal major currency pairs.
Wanna trade exotics pairs?
Always bear in mind the factors associated with it before taking your decision. I would rather advice you to stick with the majors pairs for now.
Decision is yours to take.
  

                                                         



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