Currency trading is an effective way of expanding your trading portfolio, whether the market prices move up or down.
- Being open 24 hours a day, the currency exchange market is the biggest and most fluid market globally with over $4 trillion volumes a day exceeding any other exchange market.
Essentials of Currency Trading
Trading currency pairs involves the buying of one currency and selling of another. For example, the EUR/USD is a frequently exchanged currency pair where EUR (Euro) is the base currency and USD (US Dollar) is the quote currency. Considering this pair as whole entity, not just EUR or USD discretely, with a rate at 1.14432, that means for every 1 EUR equivalents to 1.14 USD.
The 6 most actively traded currency pairs in the market, experiencing the highest volatility than any other pairs – EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/CAD and AUD/USD.
Exotic pairs typically comprise of a major currency alongside a lightly traded currency or a currency of a country’s emerging-market economy. Few examples of exotic currency pairs are USD/ZAR, USD/TRY, USD/MXN or USD/HKD.
By disparity, minors are the currency pairs with less trade activity compared to the major pairs. Any other pair than the 6 majors is considered as minor currency pair within our list of pairs.