Trading in Currency Pairs is the simultaneous buying and selling of the world’s international currencies on a centralized global market. On an outright commodity exchange, this trading is done via Composite Order Trading System (COTS). Using this functionality, a trader may take two positions simultaneously in Gold milli ounce futures contracts with a single click. In other words, if a trader wants to take simultaneously long position in the USD Gold and short position in the EUR Gold, he will place a single order through COTS. The long gold in the first trade and the short gold in the second trade will ‘cancel’ each other, leaving the trader with an open EUR-USD position only. It is regulated, standardized and therefore exchange traded. It’s also referred to as the foreign exchange or FX market. As one of the largest and most liquid financial markets in the world, its total average turnover per day is reported to exceed $5 trillion
Our forex pairs are available to trade. When trading forex, you speculate whether the price of one currency will rise or fall against another.
For example, if you choose to trade GBP/USD (British pound/US dollar) and you think the value of the GBP will rise against USD, you go long (buy). If you think GBP will fall against USD, you go short (sell). If your prediction is correct, you make a profit. If your prediction is incorrect, you would make a loss. Remember, losses can exceed deposits.
Forex is always traded in currency pairs, for example EUR/USD. The first currency (EUR) is called the ‘base currency’. The second currency (USD) is known as the ‘counter currency’. The way currencies are displayed shows us how many units of the counter currency you can buy with one unit of the base currency. This is the exchange rate, or in other words, how many US dollars you can buy for one euro.
Currency pairs can generally be divided into three groups: major, minor and emerging.
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