Forex forex exchange rates
The first currency is referred to as the base currency and the second as the counter or quote currency. If buying, an exchange rate specifies how much you have to pay in the counter or quote currency to obtain one unit of the base currency. If selling, the exchange rate specifies how much you get in the counter or quote currency when selling one unit of the base currency. A currency exchange rate is forex given as a bid price and an ask price. The bid price is always lower than the ask price. The bid price represents what will be obtained in the quote currency when selling one unit of the base currency. The ask price represents what has to exchange paid in the quote currency to obtain one unit of the base currency. In this example, the BID price is The second component after the slash is used to obtain the ASK price what you have to pay in EUR if you buy USD. In this example, the ASK price is The difference between the bid and the ask price is referred to as the spread. In the example above, the spread is or 5 pips. When trading smaller amounts, the spread is typically larger. Credit card companies typically apply a spread of pips. Banks and exchange bureaus typically use forex spread in the range of pips in addition to charging a commission. Most currencies are traded directly against the US Dollar. The market rates that are expressed for such currency pairs are called direct rates. In most cases, the US Dollar is the base currency pair whereby the quote currency is expressed as a certain number of units per 1 US Dollar. For some currency pairs, the US Dollar is not the base currency but the counter or quote currency. The market rates that are expressed for such currency pairs are called indirect rates. This is the case with GBP British Pound or "Cable"NZD New Zealand DollarEUR Ratesand AUD Australian Dollar. When one currency is traded against any currency forex than the USD, the market rate for this currency pair is called a cross rate. Cross rate is the exchange rate between two currencies not involving rates US Dollar. Although the US dollar rates do not appear in the final cross rate, they are forex used in the calculation and so must be known. Trading between two non-US Dollar currencies usually occurs by first trading one forex the US Dollar and then trading the US Dollar against the second non-US Dollar currency. Now that you understand exchange rates, learn the anatomy of the trade. To actively trade currencies, one has to understand their value, the exchange rate and bid and ask prices as well as the concept of the spread. Knowing the direct rate, the indirect rate and a cross rate of a currency pair can help you understand what traders use to develop long- and short-term strategies for trading Forex. Rates can learn more about basic entry and exit rules for trading foreign exchange here as well as how to calculate your profits and losses. Ready to try a demo account and get started trading Forex on exchange own? Leverage creates additional risk and loss exposure. Before you decide to trade foreign exchange, carefully consider your investment objectives, experience level, and risk tolerance. You could lose some or all of your initial investment; do not invest money that you cannot afford to lose. Educate yourself on the risks associated with foreign exchange trading, and seek advice from an independent financial or tax advisor if you have any questions. ADVISORY WARNING: Rates provides references and links to selected blogs and other sources of economic and market information as an educational service to its clients and prospects and does not endorse the opinions or recommendations of the blogs or forex sources of information. None of the blogs or other sources of information is to be considered as constituting a track record. Past performance is no guarantee of future results and FXDD specifically advises clients and prospects to carefully review all claims and representations made by advisors, bloggers, money managers and system vendors before forex any funds or opening an account with any Forex forex. Any news, opinions, research, data, or other information contained within this website is provided as general market commentary and does not constitute investment or trading advice. FXDD expressly disclaims any liability for exchange lost principal or profits without limitation which may arise directly or indirectly exchange the use of or reliance on such information. Technical Analysis Expand for realtime data Have Questions About Forex? FXDD is Ready To Answer Your Toughest Trading Questions.
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