Forex Basic 1 PAIRS

There are tons and tons of information on "What is Forex?" and term used for forex trading.

I will try to explain everything in layman's term but if you love reading up more there a good website investopedia , they have lots of information on investing not only forex. It worth to take a look.

Back to Forex.....

Forex is also known as currency trading, when it come to currency trading we always do it in pairs.
ie. EUR/USD, GBP/USD, USD/JPY

Some of the common pairs most people trade are EUR/USD, GBP/USD, USD/JPY, AUD/JPY, AUD/USD

This few pairs are more popluar due to pairs with the least spread, better rollover and more movement.

EUR = EURO DOLLAR
USD = AMERICA DOLLAR
AUD = AUSTRILA DOLLAR
JPY = YEN/ JAPAN DOLLAR
GBP = POUND / UK DOLLAR

I will explain using EUR/USD.

MAIN CURRENCY / TRADING CURRENCY
1 EURO = 1.4115 USD
What it means?

You are comparing this 2 currency the euro and the dollar.

When you buy this pair you are buying euro using usd, so when the euro get stronger say the exchange rate hit 1 EURO= 1.5 USD you will earn 0.0885 per euro dollar you buy.

If you will to sell this pair mean you buying USD using euro.

layman's term -
you think 1 EUR can change more USD = buy
you think 1 EUR can change less USD = sell

Next i will talk about spread and pips