Video: What are Currency Pairs?
Welcome to Alvexo’s free Forex trading tutorial for aspiring traders. The following tutorial will teach you about the basic unit if Foreign Exchange (Forex): the currency pair.
This is the basic unit that enables us to trade global currencies. The Forex market (Foreign Exchange) is qu’énorme: its volume reached a value of more than $ 5 trillion (5,000 billion) of daily turnover.
In Forex, you invest in options trading currencies. The two currencies that we trade against each other are called a currency pair. And each pair is designated by two series of currency abbreviations – one on the left is the base currency and a right, the counter currency. The value of the pair is equal to the amount of matching currency units you need or that you get against a base currency unit.
To make a profit, we may ask for a low-interest loan and invest it at a higher interest. At the end of the term, we should pay interest for the loan but would get more interest on our investment.
The Forex is not really to make a loan, but to invest in the ability to do so. The value of the opportunity may increase or decrease, and we can win both ways if we have the good forecast.
Now that you understand how currency pairs can be traded, follow on to the next tutorial in the series: What is Forex. Or, open a demo account and practice trading Forex in a risk free environment.