Basics of Forex Trading
Forex trading is defined by buying one currency and selling another currency simultaneously. That's why we talk about parity Forex: EUR-USD, EUR, JPY, USD-CHF. The first currency is called the base currency.
For active traders, these base currencies are interesting. Over 85% of all trades of the day concerned parities USD, JPY, EUR, GBP, CHF, CAD and AUD.
Like all other financial instruments, currencies are treated using the bid-ask range. The "bid" is the price which the broker wants to buy your currency.
The "ask" is the price at which it wants to sell its currency.
Bid is the price you can sell your currency at the broker.
Ask is the price you can buy the currency broker.
Let's say we buy at the ask, we will then sell and buy 100 000 CHF 8,998,000 JPY. Our profits / losses are calculated in EUR if our account is in EUR. Tags: Forex Currency, Forex Tips, forex trading
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