Forex For Beginners – Major Currencies Traded
Unlike stock market, Forex market behaves differently and has its own rules and discipline. It is these differences that make Forex trading a good addition to an investment portfolio because it adds diversity. With Forex, the trading does not actually take place physically but it all happens on the computers screens. The different currencies are bought and sold by keeping track of the past charts and current positioning of a particular currency pair.
There are many official currencies that are utilized by different countries of the world, but only a handful of the currencies are commonly traded in the Forex market. Since Forex trading is 24 hours activity and continues all seven days a week non-stop, only those currency pairs that are most economically/politically stable and liquid remain in demand in sufficient quantities to be traded. For instance, the US Dollar is the most demanded and traded currency in the world due to the enormous size and strength of the American economy.
These are the most traded currencies in random order:
- U.S. dollar (USD)
- Canadian dollar (CAD)
- Euro (EUR)
- British pound (GBP)
- Swiss franc (CHF)
- New Zealand dollar (NZD)
- Australian dollar (AUD)
- Japanese yen (JPY)
Since currencies in the Forex market must always be traded in pairs, there are 27 different possible currency pairs that can be derived from the existing eight currencies alone. Currently there are about 18 currency pairs that are conventionally quoted by Forex market makers as a result because of their overall liquidity. The currency pairs that are commonly traded in Forex are the following:
- USD/CAD
- EUR/JPY
- EUR/USD
- EUR/CHF
- USD/CHF
- EUR/GBP
- GBP/USD
- AUD/CAD
- NZD/USD
- GBP/CHF
- AUD/USD
- GBP/JPY
- USD/JPY
- CHF/JPY
- EUR/CAD
- AUD/JPY
- EUR/AUD
- AUD/NZ
The total amount of currency trading involving these 18 pairs represents the majority of the trading volume in the FX market. This manageable number of choices makes trading a lot less complicated compared to dealing with equities, which has thousands of possible choices to choose from.
Whenever there is a morale boosting or negative event takes place in any of the countries, whose economy and currency is in demand, then such an incident can impact the upward or downward price movement of that particular currency price. This is why an experienced trader or broker will keep a constant eye on world events, especially in the countries that they are trading currencies from.
Brokers or brokering firms trade the currency of their choice sitting anywhere in the world and while doing so, they keep track of the political scenario, economic policies, and current affairs of all the major countries, which might affect the buying and selling scenario. The brokers also have to study and master the charts of previous currency movements.
The advantages of being a New Century International client includes live news, free quotes, free charts, toll free broker assistance, no maximum account size, trade recommendations, 24-hour online account access, and complimentary research reports. With a $5000 minimum investment you can get started investing in Forex with New Century International. Learn more about their history and contact a financial expert today.
