Welcome back dear loyal readers of Invest In The Stock, we are always very pleased and honored to have you here with us again. In today’s article we will talk about finance and specifically, we will analyze what forex currency pairs are.
We will see how they work, their characteristics and which ones are the best to trade.
How does Forex trading work?
Let’s first see what online forex trading is and how it works.
Let’s start with the basic information of this financial market, the Forex exchange, also defined by the acronym FX, which is the name that identifies the Foreign Exchange Market (the largest financial market in the world, especially in terms of liquidity).
Until some time ago, before online trading spread exponentially, the Forex market was the exclusive preserve of the large institutions in the world of finance.
With the widespread diffusion of the Internet globally, many people, even small investors, have thought of entering the forex market for major currencies, trying to buy and sell currencies.
All this was also accelerated by the spread of devices always connected to the Internet, allowing anyone, with a simple click and through online brokerage platforms, to invest in the best currency pairs available today.
Forex trading online
The mechanism of online forex trading, in fact, is really simple.
Since it is a matter of simultaneous trading of certain Forex currency pairs.
On a practical level, one buys one and simultaneously sells another currency.
The best forex currencies are always traded in pairs, for example: the Euro and the US Dollar (EUR/USD).
On the other hand, these exchanges must take place with a Forex broker or dealer, who acts as an intermediary.
Technical features of Forex
One of the main characteristics and peculiarities of the international forex market for the most traded currencies is that of not having an official physical location.
Consequently, it has no official prices.
For this reason, Forex currency exchange is referred to as the over-the-counter (OTC) market, which means that all transactions are made on globally located computer networks.
How to start investing in Forex trading?
Now let’s see how to start doing Forex trading on the best currency pairs.
The first thing to do, of course, is to have a device, whether it’s a smartphone, a tablet or a PC, it doesn’t matter much, that can connect to the Internet.
The second thing necessary to do online forex trading is to sign up for one of the online trading platforms on the market.
Yes, because to operate in this sector you will necessarily have to open an account on the site of one of these professional Forex brokers.
We at Invest in The Stock advise you, especially if you are a beginner in this market, to use the Forex demo accounts available for free on these virtual platforms, in order to:
- Being able to train without investing real money
All the time necessary to learn how the Forex market works correctly.
👉 Read also: Forex Demo Account, What it is
In addition to these Forex demo accounts, almost all online trading brokers offer free courses that customers can follow in order to be able to have a complete general overview and preparation.
Best online Forex trading platforms
In today’s market there are really many platforms to start investing in correlated Forex pairs.
But even in this case, you must always pay close attention to the brokers you want to contact.
Our advice is to always opt for the best-known and internationally used online trading platforms.
In this way, you have the guarantees and security of not running into poorly prepared and unreliable people, and above all, avoiding scams and reducing the risk of financial loss.
Which platform to trade?
To give some examples, platforms such as Etoro, Plus500 and Degiro are regulated online brokers with excellent references. We remember you Plus500 is a CFD provider and they offer CFD service only. All the instruments, including the Forex pairs, are available for trading only through CFDs.
👉 You might be interested in: eToro Income Statement
As previously mentioned, just sign up by entering your data, quickly and easily.
After that you can start investing in complete safety on the main Forex pairs.
However, we recommend that you do a lot of practice through the free demo accounts, present within these specialized sites, in order to learn everything about forex currency pairs.
👉 Discover also: Best Online Trading Platform 2023 For Investing
Forex currency pairs
Now let’s see what forex currency pairs are.
In practice, a currency pair involves the simultaneous and simultaneous exchange of two currencies.
Although composed of two currencies, it acts as a single instrument, since it has a specific value.
Furthermore, those who decide to invest in major forex pairs can buy and sell these currencies, making a profit or a loss.
We must remember that, all forex currency pairs consist of a base and a quote.
In concrete terms, during the writing phase, the base is on the left and the quotation, on the other hand, on the right.
FOREX CURRENCY LIST
Finally, let’s see what are the various types of forex currency pairs.
📉 Major couples or Majors
The first we will analyze are the main currency pairs, also called Majors, which are the most common in online Forex trading.
Additionally, these forex currency pairs make up the major international economies, due to the presence of the Dollar or USD in each pair.
Therefore, they represent the highest trading volume, and although their values tend to fluctuate, it is rare to see major changes in the market.
📉 Minor couples
The second ones we are going to evaluate are the minor couples.
These most traded forex currency pairs do not feature the USD, but have at least one major currency, such as GBP, JPY or EUR.
Among other things, they are more volatile currency pairs, as well as having a higher forex spread.
📉 Exotic couples
The last type we are going to look at are exotic currency pairs.
As for these forex trading currency pairs they feature two currencies, one that comes from the major ones and one from an emerging economy.
For example, USD/PLN and USD/RUB.
Well dear friends of Invest In The Stock, we also want to remind you that despite their popularity, forex currency pairs can be particularly difficult to understand, especially if you are new to the forex market, so we advise you to take some Forex courses offered free from the main online trading platforms.
Invest In The Stock, The Editorial Staff
© REPRODUCTION RESERVED