Currency trading is trading on buy and sell currencies in the Forex market.
The currency exchange rate is the rate at which one currency exchange for another currency.
It is always quoted in pairs like the EUR/USD (the Euro and the US Dollar).
The economic factors Like inflation, industrial production, and geopolitical events will influence whether you buy or sell a currency pair.
Currency pair means a pair of two different currencies, With the value of one currency compared to the other.
The first listed currency pair is the base currency and the second currency is the quote currency.
Why trade currencies?
Forex is the world’s biggest market, with about 5 trillion dollars in daily volume and 24-hour market action.
Main differences between the Equity market and forex markets are:
1. Many companies(forex brokers) don’t charge commissions–you only pay for the bid / ask spreads.
2. Twenty-four hours of trading–you dictate when to trade and how to trade.
3. You can trade on leverage, but this can increase potential profits and losses.4.
4. You can focus on collecting from a few currencies rather than from 5,000 stocks.
5. Forex is available–you don’t need a lot of money to get started.
Basics of Currency Pairs
The trading of currency pairs takes place on the forex market, also known as the forex market
.It is the financial world’s biggest and most liquid market. This market enables currency Buying, selling, exchanging and speculating.
The forex market is open 24 hours a day, five days a week (except holidays), and sees a huge volume of trading.
It also enables currency conversion for international trade and investment.