sponsor_07

The New Stuff

192 Views

Different Kinds of Currency Pairs


Forex trading is practically trading money in exchange of money to gain money. If that sounds a little complicated, forex trading is the trading of different kinds of money called currencies.

The Forex Live Account forex market works 24 hours a day, 5 days a week. Money never sleeps, indeed. This is because money circulates around the world and it doesn’t stop moving. It’s always on the go.

Now, if you want to successfully trade in the forex market, you have to learn HQBroker Review much about its most basic components, which are currencies and currency pairs.

You already know what a currency is, so let’s start the discussion by talking about currency pairs.

What are currency pairs?

When you are trading currencies in the forex market, you do not work with only one kind of currency. You have to exchange one currency for another, exposing you to two different kinds of currencies. And these two currencies make up what is called the currency pair.

The currency pair is the quotation of your traded currencies. By looking at the values of the currencies in a currency pair, you can know the value of one currency relative to the value of another.

In a currency pair, the values are shown as rates. And in the two currency symbols you see, the first currency is called the base currency and the second currency is called the quote currency.

The pair will tell you how much of the quote currency is needed to buy or equal one unit of the base currency.

Effectively, when you trade currencies, you are buying and selling two currencies at the same time. Lastly, bear in mind that there are as many currency pairs in the world as there are currencies.

Further, there are primarily three types of currency pairs in the whole forex market, which are the major currency pairs, minor currency pairs, and the exotic currency pairs.

We’re going to tackle these three kinds of currency pairs.

Major Currency Pairs

Simply put, the major currency pairs are those that have the US dollar, or USD, on the side. These currency pairs are the most frequently traded and all of them have extremely liquid markets. They are traded for 24 hours in one business day, while also sporting narrow spreads.

The major currency pairs include:

  • EUR/USD
  • GBP/USD
  • USD/JPY
  • USD/CHF
  • AUD/USD
  • USD/CAD

Minor Currency Pairs

The minor currency pairs are those that do not include the US dollar in the quote or base currency. These are also known as cross-currency pair, and are not as liquid or popular as the major currencies.

The minor currency pairs include:

  • EUR/GBP
  • EUR/AUD
  • GBP/JPY
  • CHF/JPY
  • NZD/JPY
  • GBP/CAD

Exotic Currency Pairs

When we say that the currency pair is exotic, we’re talking about the combination of a major currency and the currency of a developing economy like South Africa or Brazil. These currency pairs are not found as often in the market as the major and minor currency pairs. This means that the spreads are higher when you trade them. They also have very low liquidity.

The exotic currency pairs include:

  • EUR/TRY
  • USD/HKD
  • JPY/NOK
  • GBP/ZAR
  • AUD/MXN
  • USD/SGD

Recently Published

»

When Do You Know if Your Commercial Boiler Needs Servicing? Your Top Questions Answered

Did you know that the UK was next only to China and South Korea when ...

»

How to Get Started with Bitcoin

Bitcoin is the world’s most popular digital currency and also the ...

»

Juno markets: an in-depth review of it

Juno markets is an offshore, Vanuatu based retail FX broker. The ...

»

Procurement agency plays a great role in producing premium products

When sourcing from another nation, it is important that you learn the ...

»

Once a trade is live, detach yourself

The most common mistake that is done by novice traders and also by ...

»

How Trading Tutorials Help to Know About Trading Conditions

It is very easy to find a number of persons who are engaged in ...

»

Working of Bitcoin mixing service

Because of the popularity of bitcoins, many people are gaining ...

»

Trading with a micro forex broker account

Forex trading is a very lucrative form of trade as long as the trader ...

»

10 Keys to Achieve Success in the Organisation of Events

Organising any event requires global strategic planning in which we ...