All 180 currencies are abbreviated by their unique names. For instance, US Dollars are USD, Euros are EUR and British Pounds are GBP. Here is a brief summary of each abbreviation.
Trading forex means buying one currency and simultaneous selling another.
It is essential to remember how currency pairs are expressed and traded.
EUR / USD
(Base currency) (Quote currency)
The currency in which the exchange rate is to be displayed is the base currency of the trading.
The currency is exchanged for a base currency with gains and losses
With the exchange rate, a trader will decide how much of the quote currency they require to buy the base currencies.
In general, the eight most traded currencies (in no specific order) are the U.S. dollar (USD), the euro (EUR), the Japanese yen (JPY), the British pound (GBP), the Australian dollar (AUD), the Canadian dollar (CAD), the Swiss franc (CHF) and the New Zealand dollar (NZD).
There are the most frequently traded currency pairs in the world
|FX Symbol||Country||Trading Terms|
|EUR/USD||Eurozone / United States||Euro dollar|
|USD/JPY||United States / Japan||Dollar yen|
|GBP/USD||United Kingdom / United States||Pound dollar|
|USD/CHF||United States / Switzerland||Dollar swissy|
|USD/CAD||United States / Canada||Dollar loonie|
|AUD/USD||Australia / United States||Aussie dollar|
|NZD/USD||New Zealand / United States||Kiwi dollar|
The advantage of trading popular currency pair is that the more people trade, the lower spread they get.
Forex is a two-way revenue structure. You can make profits both ways whether the exchange rate goes up or down.
For example, suppose the exchange rate for AUD/JPY is 81.386 – 81.417. Investors will buy AUD/JPY at 81.417 if they expect the Australian dollar to rise. If the exchange rate rises to 82.417 they will get 100,000 yen. Investors can sell AUD/JPY at 81.386 if they expect the Australian dollar to fall. If the exchange rate falls to 80.386 they will get 100,000 yen as well.