Currencies in Forex Trading

In Forex Trading. Traders tend to choose a particular currency to be traded. Choose a currency trader who traded based on:

* Spread or the difference between the selling price or purchase price of a relatively small
* Trader considered easier to analyze the movement of currencies of certain countries than others

The currency traded at most can be divided into two types: major and minor. Major currency is the currency that categorized most frequently traded, popular and greatly affect the forex market. Major currencies are USD, EUR, GBP, CHF, JPY, AUD and CAD. While the minor currencies are currencies other than currency.

Currency  in Forex Trading

Currencies are traded in pairs (pair). All currencies are in pairs with the USD is also called the major pairs (pairs uatama). The most heavily traded major pairs are: EUR / USD, GBP / USD, USD / JPY, and USD / CHF.

Why should the currency pairs? This happens because in every foreign exchange transactions, there must be an exchange between currencies or collectively, the sale and purchase transactions. If you swap rupiah to the dollar, it says you are buying dollars and selling dollars. Whereas if you exchange your dollars with the dollars, then say you sell dollars and buy dollars.

The first currency in the pair is called the base currency (major currencies), while the second currency in the pair is also called the cross currency (currency opponent). This means that there is standardization in the world of forex currency pairs. Example: pair EUR / USD is unusual is written upside down USD / EUR. If you want to buy EUR / USD, is unusual if you say want to sell USD / EUR. Namu must say you buy EUR / USD.

Currently, the total daily transactions in foreign exchange (forex) is very large, can reach more than 2 trillion USD. There are various parties who become forex traders with different interests.

Forex Trading Principals include:

The Bank will establish a network of forex trading in the interbank network. A bank can trade up to billion dollar in one day.

Multinational Enterprises.
Multinational Enterprises is a company engaged in export or import of which must pay for goods or services using an agreed currency country.

Central Bank. Central Bank is a bank that aims to keep inflation and economic stability of his country. In carrying out its policy, central banks often make the country’s currency value changes.

Market Maker or Dealer.
Market maker is a party against the transaction. If a trader to buy, the trader must sell. And vice versa. Often times the company’s market maker is also the broker.

Broker is an intermediary that connects between the trader with the trader. Brokers benefit from commissions and spreads. Spread is the difference between the selling price and buying price.

Trader or a speculator.
Trader is a forex players who aim to profit from currency fluctuations relative to other currencies.

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