All currency trades involve two currencies, and trades are facilitated by a forex broker. Currency markets are open 24-hours a day during the week, which is an advantage over the stock market which is forex valutahandel open for a portion of each week day.
The forex industry is not heavily regulated and provides high leverage. That said, there are also risks that forex traders need to be aware of, as well some basic information they should know before starting. These articles provide an overview of these crucial basics, including what a currency pair is, currency pair symbols, trading hours, position sizing and pip values, how profits are made, leverage, capital requirements for trading, forex brokers and trading fees. If you are going on a trip to Europe, you take your US dollars and exchange them euros.
That’s a currency transaction—exchanging one currency for another. Forex traders do the same thing, except they are attempting to profit from changes in the prices of the currencies. Currencies are always quoted relative to one another, called a pair. USD is the price of US dollars relative to euros.
There will be a price associated with the currency pair, and that price will constantly change. For example, if the price is 1. 1000, that means it costs 1. 10 US to buy one euro. 2525 US to buy one euro.
Whatever order the currency pair is in reflects how much the second currency costs relative to one unit of the first, as mentioned above. To see how much it costs of the first currency to buy one unit of the second, flip the signs and then divide 1 by the price. 20 that means it costs 1. 20 Canadian to buy 1 US dollar. USD, we can see how many US dollars it takes to buy one Canadian dollar. All other global currencies also have symbols.