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Currency pairs in forex trading

 Currency pairs in forex trading, understanding the mechanism of forex trading within the system of pairs is one among the difficulties that new traders may face, especially if they're stock exchange investors, because the matter differs slightly, and through subsequent article, we'll shed light on the concept of the pairs system within the forex market or forex trading, additionally to going to know On the foremost popular and traded currency pairs on the market.

 

The most famous and strongest global currencies

Before we mention the concept of currency pairs in forex trading, we must get to understand the foremost famous global currencies, which are the currencies of the main countries that have economic weight, which is eight currencies:


 

• The US dollar USD - it's the currency of the us of America and is nicknamed the Buck or Buck.

• The Euro - which is that the currency of the ecu Union countries - is named Fiber.

• The British pound GBP - the currency of england - is nicknamed cable or cable.

• The Japanese yen - the currency of Japan - is nicknamed the yen or Yen.

• The Australian dollar , the currency of Australia, is named Aussie.

• The New Zealand dollar NZD - the currency of latest Zealand - is nicknamed Kiwi or Kiwi.

• The Canadian dollar , the currency of Canada, is named the Loonie.

• The Swiss franc - the currency of Switzerland - is named Swissy.

 

The concept of a currency pairs trading system

 

Trading within the currency market or forex trading is slightly different from trading within the stock exchange , the method of trading doesn't include one currency but includes two currencies together, forex trading while you purchase one currency you're necessarily a seller of another currency, somewhat almost like the swap or barter system.

 

Imagine that you simply have an amount of the US dollar and you visited a currency exchange office to exchange the dollar for the corresponding Saudi riyal, note that the method contains two currencies and not one currency, so you sold dollars to shop for the Saudi riyal consistent with the rate of exchange of the US dollar against the Saudi riyal, and this, in short, is what's wiped out the currency market or forex trading.

 

Therefore, trading within the forex market or forex trading is understood because the Pairs Trading system, whereby all two currencies are combined together in one pair to trade one currency against the opposite .

 

The first currency during a currency pair is named the bottom currency and therefore the second is named the counter currency, and every currency pair has an rate of exchange .

 

In the previous example, the bottom currency is that the US dollar, whose symbol is USD, and therefore the counter currency is that the Saudi riyal, and therefore the rate of exchange is that the required amount of the counter currency, "the Saudi riyal," to shop for one unit of the bottom currency, "the US dollar", which equals 3.7509 Saudi riyals to shop for one dollar.

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