Forex like a forest with major currencies, our job as a trader is "splice" two currencies and wait for its development.
Read Forex Quote
"Okay, copulate. And then between the two currencies is already a pair that's who became a husband? "
Good question, though strange .... But it's not like it's a way of reading a Forex quote. Basically in Forex transactions, when we buy (buy) one currency, automatically we sell (sell) the currency to be his counterpart. For example, on a pair of Euro vs dollar, as shown in the image below:
A currency that appears in front of a slash is known as the base currency or, in this case EUR, while the existing currency behind the slash is commonly called the counter or quote currency or in this case the USD.
If the order we do is "buy" exchange rate, tell us how much we have to pay to use the quote currency to obtain the base currency. More simply, let's use the example above. To buy EUR 1, we have to pay USD 1.3186.
When we do a "sell", the exchange rate tells how many units of the quote currency will we be when selling one unit of the base currency. If you use the example above, that means we will get USD 1.3186 when selling EUR 1.
In order to more easily understand about pair trading and how to use it, we simply menghapalkan the key: the base currency is the "base" or "basis" to order "buy" or "sell" us. So ... when we buy EUR/USD, it means that we are buying euros and selling Dollars.
Still dizzy? Just let our attention to buy (for example) the pair EUR/USD, if we believe the base currency (EUR) will go up in value. Instead, we only need to sell pairs, if you believe the quote currency (USD)-lah is going up. Simple, right?
Long/Short
We need to remember the formula for the term are:
The first formula: long = buy
The second formula: short = sell
The first thing we must do is determine the order, whether we want to buy or sell.
If you want to buy, we must ensure that the value of the base currency is rising. After purchasing, we'll resell it with higher prices. If the dictionary trader, what we do is called "going long" or doing "long position." In this case, the first formula is applicable.
Now, if we want to sell, we must ensure that the value of the base currency is down. Then we will buy a pair with the base currency is the lowest price. The dictionary trader, our action is called "going short" or "short position". In this case, we are simply considering the second formula.
Bid/Ask
All Forex quote is cited with two prices: bid and ask. The bid values are generally lower than the ask.
Bid is the price at which the broker we are willing to buy the base currency of the quote currency. It means ... the bid price is the price the best quote currency sales, which will be sold to traders (US) to the market.
While ask is the price at which the broker we are willing to sell the base currency against the quote currency. Which means ... the ask price is the price of purchasing the quote currency is the best one to buy, trader (US) from the market.
The difference between the bid and ask price is known as the spread. To simply put, let's look at the example below:
The quote EUR/USD above, the bid price was 1.36407 and the ask price is 1.36428. If you want to sell EUR, live click "sell" and we are going to sell at the price of 1.36407 Euro. On the contrary, if we want to buy EUR, live click "buy" and we will be buying the Euro at the price of 1.36428.
To calculate the spread examples above is the ask price, bid price-or 1.36428-0.00021 = 1.36407. This is the price we have to pay the broker.
Next lesson: in action in Forex Trading
Read Forex Quote
"Okay, copulate. And then between the two currencies is already a pair that's who became a husband? "
Good question, though strange .... But it's not like it's a way of reading a Forex quote. Basically in Forex transactions, when we buy (buy) one currency, automatically we sell (sell) the currency to be his counterpart. For example, on a pair of Euro vs dollar, as shown in the image below:
A currency that appears in front of a slash is known as the base currency or, in this case EUR, while the existing currency behind the slash is commonly called the counter or quote currency or in this case the USD.
If the order we do is "buy" exchange rate, tell us how much we have to pay to use the quote currency to obtain the base currency. More simply, let's use the example above. To buy EUR 1, we have to pay USD 1.3186.
When we do a "sell", the exchange rate tells how many units of the quote currency will we be when selling one unit of the base currency. If you use the example above, that means we will get USD 1.3186 when selling EUR 1.
In order to more easily understand about pair trading and how to use it, we simply menghapalkan the key: the base currency is the "base" or "basis" to order "buy" or "sell" us. So ... when we buy EUR/USD, it means that we are buying euros and selling Dollars.
Still dizzy? Just let our attention to buy (for example) the pair EUR/USD, if we believe the base currency (EUR) will go up in value. Instead, we only need to sell pairs, if you believe the quote currency (USD)-lah is going up. Simple, right?
Long/Short
We need to remember the formula for the term are:
The first formula: long = buy
The second formula: short = sell
The first thing we must do is determine the order, whether we want to buy or sell.
If you want to buy, we must ensure that the value of the base currency is rising. After purchasing, we'll resell it with higher prices. If the dictionary trader, what we do is called "going long" or doing "long position." In this case, the first formula is applicable.
Now, if we want to sell, we must ensure that the value of the base currency is down. Then we will buy a pair with the base currency is the lowest price. The dictionary trader, our action is called "going short" or "short position". In this case, we are simply considering the second formula.
Bid/Ask
All Forex quote is cited with two prices: bid and ask. The bid values are generally lower than the ask.
Bid is the price at which the broker we are willing to buy the base currency of the quote currency. It means ... the bid price is the price the best quote currency sales, which will be sold to traders (US) to the market.
While ask is the price at which the broker we are willing to sell the base currency against the quote currency. Which means ... the ask price is the price of purchasing the quote currency is the best one to buy, trader (US) from the market.
The difference between the bid and ask price is known as the spread. To simply put, let's look at the example below:
The quote EUR/USD above, the bid price was 1.36407 and the ask price is 1.36428. If you want to sell EUR, live click "sell" and we are going to sell at the price of 1.36407 Euro. On the contrary, if we want to buy EUR, live click "buy" and we will be buying the Euro at the price of 1.36428.
To calculate the spread examples above is the ask price, bid price-or 1.36428-0.00021 = 1.36407. This is the price we have to pay the broker.
Next lesson: in action in Forex Trading
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