What Do You Trade On The FX Market?

The simple answer is MONEY.

Since Forex trading is the simultaneous Buying of one currency and the Selling of another, therefore, you trade two currencies at a time.

We call it pairing.

To summarize it all, currencies are traded in pairs in foreign exchange business. That’s why as you are buying the strong currency, you are at the same time selling the weak one;

For example,

European Euro and United States Dollar is represented as EUR/USD,

 British Pound and United States Dollar as GBP/USD and 

British Pound and Japanese Yen as GBP/JPY..... etc.

Because you're not buying anything physical, this kind of trading can be confusing.

Think of buying a currency as buying a share in a particular country.

When you buy, say, Canadian Dollar (CAD), you are in effect buying a share in the economy of Canada at that particular price and time.

The price of the currency is a direct reflection of what the market thinks about the current and future status of that country’s economy.

To be precise, the currency value of any country you buy into or sell out of depends on whether the economy is strong or weak at that point in time.

In this effect, the currency value of a Country is the yardstick for measuring the Nation’s economy.

You measure the US economy with the Dollar, New Zealand economy with NZD.. etc.

Ok, buddy, let’s take a look at the major traded currencies.