Basic of Forex market
Currency pair:
By the system of share market a share of a country should be evaluate against the currency of that country.
However, in Forex market it is impossible to evaluate of a countries currency. Like against 1 USD we got 0.91 EURO (EUR) or 1.34 Australian Dollar (AUD). Again, if we talk about Japanese YEN (JPY) you can get 114 Yen against dollar.
However, in Forex market it is impossible to evaluate of a countries currency. Like against 1 USD we got 0.91 EURO (EUR) or 1.34 Australian Dollar (AUD). Again, if we talk about Japanese YEN (JPY) you can get 114 Yen against dollar.
Which is the real value of dollar?
People of different countries trade in Forex market then in which rate they buy Dollar $ that is why in Forex market every trade complete by currency pair.
Such as,
EUR/USD is a currency pair.
Recently 1EUR/USD = 1.1060, means we will get 1.1060 against of one EURO.
Let us see some other currency pair:-
AUD/USD = 0.7244, means 1.7244 USD against 1 Australian Dollar (AUD).
GBP/USD = 1.4222, means 1.4222 USD against 1 Great Brittan Pound (GBP).
NZD/USD = 0.6809, means 0.6809 USD against 1 New Zealand Dollar (NZD).
USD/JPY = 113.77 means 113.77 JPY against 1 USA Dollar (USD).
GBP/JPY = 161.44 means 161.44 JPY against 1 Great Brittan Pound (GBP).
EUR/GBP = 0.7730 means 0.7730 GBP against 1 (EURO).
People of different countries trade in Forex market then in which rate they buy Dollar $ that is why in Forex market every trade complete by currency pair.
Such as,
EUR/USD is a currency pair.
Recently 1EUR/USD = 1.1060, means we will get 1.1060 against of one EURO.
Let us see some other currency pair:-
AUD/USD = 0.7244, means 1.7244 USD against 1 Australian Dollar (AUD).
GBP/USD = 1.4222, means 1.4222 USD against 1 Great Brittan Pound (GBP).
NZD/USD = 0.6809, means 0.6809 USD against 1 New Zealand Dollar (NZD).
USD/JPY = 113.77 means 113.77 JPY against 1 USA Dollar (USD).
GBP/JPY = 161.44 means 161.44 JPY against 1 Great Brittan Pound (GBP).
EUR/GBP = 0.7730 means 0.7730 GBP against 1 (EURO).
Now there is one question that why we are taking four decimal (*.****)? We are familiar to two decimal (*.**).
⇒ Actually, Maximum movement in Forex market is in 3rd and 4th decimal. So it slandered for calculation of market movement.
Let us see some movement of EUR/USD for few days:
⇒ Actually, Maximum movement in Forex market is in 3rd and 4th decimal. So it slandered for calculation of market movement.
Let us see some movement of EUR/USD for few days:
| Date | Open | High | Low | Close | Difference in Open & Close | Difference in High & Low |
|---|---|---|---|---|---|---|
| 29/2/2016 | 1.0913 | 1.0962 | 1.0859 | 1.0872 | 41 Pips | 103 Pips |
| 1/3/2016 | 1.0872 | 1.0893 | 1.0833 | 1.0856 | 16 Pips | 60 Pips |
| 2/3/2016 | 1.0865 | 1.0880 | 1.0825 | 1.0867 | 2 Pips | 55 Pips |
| 3/3/2016 | 1.0868 | 1.0972 | 1.0853 | 1.0955 | 87 Pips | 119 Pips |
| 4/3/2016 | 1.0956 | 1.1043 | 1.0902 | 1.1000 | 44 Pips | 141 Pips |
| 7/3/2016 | 1.0987 | 1.1026 | 1.0939 | 1.1011 | 24 Pips | 87 Pips |
Some Forex Brokers support 5 decimal. 5th is called Pipette. (*.*****)
Such as
| Date | Open | High | Low | Close |
|---|---|---|---|---|
| 29/2/2016 | 1.09132 | 1.09620 | 1.08593 | 1.08726 |
| Pipettes | 2 | 0 | 3 | 6 |
Related Posts
ConversionConversion EmoticonEmoticon