What is currency pairs?

You can trade most every currency in the world, including major currency pairs, minor currency pairs, and exotic currency pairs. Major currency pairs include AUD/USD, USD/CAD, GBP/USD, EUR/USD, USD/JPY and USD/CHF.The US dollar makes up over 95% of all global Forex trading activity. Minor currency pairs include less frequently traded currency pairs, and even the EUR/GBP currency pair straddles the line between major and minor.

What is a Base Currency and What is a Quote Currency?

Let us take a look at the EUR/USD currency pair. If the exchange rate is 1.2142 dollars for every euro, the EUR/USD price would be written as follows EUR/USD = 1.2142. The base currency is the euro and the quote currency is the US dollar.

What is the long selling?

Going long means that you have a positive expectation on the future value of a currency

What is the short selling?

Going short means that you have a negative outlook on a currency

What is Forex Trading Orders?

There are several different types of orders offered by brokers in the Forex world. These include Stop-Loss Orders, Trailing Stop Orders, Take-Profit Orders, Limit Orders and Market Orders. Depending on your particular trading style, you will choose in order type that best suits your trading needs.

What is Stop-Loss Orders?

Stop-Loss Orders are geared towards stopping you from incurring further loss on your open Forex trades. It also helps you to avoid margin closeouts. This type of Forex trading order is especially useful since it works to protect you from further loss when the exchange rate goes against you.Stop-Loss orders do not completely eliminate risk, they only restrict your losses. Forex experts encourage all traders to take out Stop-Loss orders for all open positions.

What is the Trailing Stop Orders?

Trailing Stop Orders are similar to stop loss orders since they close out positions if the market moves against you. What separates a Trailing Stop-Loss from a Stop-Loss order is that the former feature ‘trails’ alongside the market price (when it is positive) until such time as it takes a downturn.Once that happens the trailing stop order kicks into effect. The beauty of the Trailing Stop Order is that you can continue to generate positive returns without following your Forex trades, knowing that when the market moves in the opposite direction the stop order will kick in.

What is the Take-Profit Orders?

Take-Profit Orders close open orders when a specified threshold has been reached. This is a solid way to lock in your profits when you are not around to monitor your trading activity.You can automatically set take profit orders for any currency pair that you are trading. Once that exchange rate has been reached and the bid price touches your threshold, the open position will be closed.

What is the Limit Orders?

Limit Orders only go into effect when specific conditions are met. When you are buying or selling a currency pair, your limit order must meet the trade stipulations to be fulfilled.Certain types of limit orders can automatically be executed when the exchange rate hits a specific level. If you wish to go long the AUD/USD currency pair, you could initiate a limit order at an exchange rate below the prevailing market rate.

What is the Market Orders?

Market Orders are executed the moment they have been placed. They are priced according to the market price. Once the market order is active, it is an open position. If the rate moves against you, your position will deteriorate.

Long or Short Currency Positions

Alvexo has designed this Currency trading article with one goal in mind: to make you a better Currency trader. The Currency market is the world's most heavily traded market, with estimated daily turnover of $4 trillion. Institutional investors and retail investors engage in currency trading 24-hours a day, 5-days a week.I t is especially important to understand the basics of the currency trading arena before you begin investing in it. Once you have completed the Alvexo series of Currency training courses, you will be better poised to make smarter trading decisions with higher success rates in your trades.

Understanding Currency Pairs

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Understanding Currency Pairs

This article is available only to alvexo plus members, register now, and get 7 days of free membership.

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