Forex Training Blog

Any currency backed by an existing nation can be traded at the larger brokers. Forex currency symbols are always three letters, where the first two letters identify the name of the country and the third letter identifies the name of that country’s currency. The most popular currencies along with their symbols are below for your information:

Symbol Country Currency:
USD United States Dollar
EUR Euro members Euro
JPY Japan Yen
GBP Great Britain Pound
CHF Switzerland Franc
CAD Canada Dollar
AUD Australia Dollar

Currency pair terminology:
EUR/USD = Euro
GBP/USD = Cable or Sterling
USD/JPY = Dollar Yen
USD/CHF = Swissy
USD/CAD = Dollar Canada (CAD referrred to as the Loonie)
AUD/USD = Aussie Dollar
NZD/USD = Kiwi

The spread is the difference between the price that you can sell currency at (BID) and the price you can buy currency at (ASK). This spread is revealed when you compare the bid and the ask price. For example EUR/USD is quoted at a bid price of 1.2553 and an ask price of 1.2556. The difference is USD 0.0003, which is equal to 3 pips.

When trading Forex, you are quoted a dealing spread offering you a buying (ASK) and a selling (BID) level for your trade. Once you accept the offered price and receive confirmation from your broker, the trade is done. There is no need to call an exchange floor. There are no other delays. This is possible due to live streaming prices, which are also a great advantage in times of fast moving markets. You can see where the market is trading and you know whether your orders are filled or not.

A pip is the smallest increment a price moves and it determined the profit or loss. For instance, the EUR/USD pair moves from 1.2500 to 1.2505 it has moved 5 pips up. When you have an open position, each up or down pip movement in the market price can be either a profit or a loss.

Currency trading is a zero sum game. A zero-sum game is a game where the amount lost by one or more players is equal to the amount gained by the other players. One trader’s winnings are another trader’s losses. At Forexmentor.com, we equip the aspiring forex traders with the necessary tools and skills to turn trading into a career.