Beginners Forex – Currencies

FOREX (Foreign Exchange) can be described as buying and selling two different currencies simultaneously.

BUY ONE CURRENCY – SELL ANOTHER

For example : USD /AUD

This is known as a currency pair. The USD is the base currency in our example and the AUD is the counter or quote currency. The base currency is the “basis” for the buy or the sell.

If you buy USD /AUD this simply means that you are buying the base currency and simultaneously selling the quote currency.

In Forex trading we exchange one currency for another in the expectation that the price will change, so that we hope the currency we bought will increase in value compared to the one we sold.

An exchange rate is simply the comparison of one currency valued against another currency. For example, the USD/AUD exchange rate indicates how many U.S. dollars can purchase one Australian Dollar, or vice versa.

The MAJOR Currencies traded are :

* USD (US Dollar)

* EUR (Euro Dollar)

* JPY (Japanese Yen)

* GBP ( British Pound Sterling)

* CHF (Swiss Franc)

* CAD (Canadian Dollar)

* AUD (Australian Dollar)

* NZD (New Zealand Dollar)

Some of these are traded to a lesser degree but are still traded as major currencies in FOREX.

Note the first two letters stand for the country and the last letter is for the name of the currency.

All other currencies are known as MINOR currencies.

For a standardised and convenient list of all currencies go here.

For a more comprehensive list of currencies go to Wikipedia.