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Earn Big Returns by learning Currency Trading in Easy Way

By Jane Cyrus Subscribe to RSS | January 21st 2012 | Views:
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The essential things of currency trading are not tough to understand. As you enter the trading market you need to know all these things. Here you will get to know many terms about foreign exchange trading in detail.

“Forex” or “FX” is abbreviation used for Foreign Exchange. FX means buying and selling of currencies and the person who buys and sells these currencies is known as forex trader. Another term you should know about currency trading is foreign exchange market. It is the largest and well known market all around the world. Trading in this market is done day and night except on weekends and other holidays. The week starts from Sunday at 17:00 as per EST till Friday 16:00 EST.

The main aim of the traders while trading is to purchase something which will give them some returns. They wait for the time when price will increase and they exchange their currency in order to have more profit. When the two currencies together make up an exchange rate considered as currency pair. Some codes are used for every currency in trade market namely, EUR for Euro, USD for US Dollar, JPY for Japanese Yen, CAD for Canadian Dollar, GBP for British pound and many more and the mostly traded currency pairs are:

USD/JPY = "Dollar Yen", EUR/USD = "Euro", USD/CHF = "Swiss", GBP/USD = "Cable" or "Sterling”, NZD/USD = "Kiwi", USD/CAD = "Dollar Canada", and AUD/USD = "Aussie Dollar".

Here, the currency on the left side is the base currency while the currency on the right side is the counter currency and we need to know the exchange rate to know, how much we have to pay to buy one unit of base currency on the basis of counter currency.

Other than this, there are many terms which generally used in forex trading. Here we will discuss in brief about these terms.

PIP – Price Interest Point is the slowest movement of currency pair.

FCM – FCM stands for Future Commission Merchant. These merchants licensed by U.S. CFTC and charge monies from their clients to trade.

DD (Dealing Desk) – It provides liquidity, pricing and implementation of trades.

NDD (No Dealing Desk) – It use external liquidity in order to provide liquidity and pricing for their clients.

There are many things to study about forex trading and to know more you need to spend time in studying about it. As you start engaging yourself in these transactions you will gain complete knowledge of forex trading. Remember that a beginner should start with basic currency trading

Jane Cyrus - About Author:
There is much to learn and you must invest time in studying the forex trading market. You will need the knowledge as you engage yourself in transactions. It is always best to start with basics currency trading.

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