Definition of FOREX Pairs

forex currency exchange

By Sharon Moran

Forex refers to the foreign exchange market where currencies are traded. Currency trading represents the largest financial market worldwide, and it is the most liquid market. Currencies are logically grouped into pairs. - forex currency exchange

Currency Pairs Explained

Currencies are traded in pairs. The purchase of one currency includes the sale of another and vice versa. - forex currency exchange

The Majors

There are four major currency pairs, and each major pair includes the U.S. Dollar. The majors are the Euro-Dollar, the Dollar-Yen, the Sterling-Dollar, and the Dollar-Swiss. - forex currency exchange

The Minors

There are three minor currency pairs, and each include the U.S. Dollar. The minor pairs are the Dollar-Canada, the Australian-Dollar, and the New Zealand-Dollar. - forex currency exchange

The Crosses

Cross-currency pairs are currency pairs that don't include the U.S. Dollar. The three main groups of cross-currency pairs are the Euro crosses, the Yen crosses, and the Sterling crosses. - forex currency exchange

Warning

It's important to never risk more money when currency trading than you can afford to lose without the loss affecting your well-being and lifestyle. - forex currency exchange

References

• Currency Pairs
• Currency Pairs

forex currency exchange

What Are FOREX Pips?

forex currency exchange

By Sharon Moran

The foreign exchange, or FOREX, market refers to the exchange of foreign currency pairs. Currency trading involves buying and selling currency pairs in the FOREX market. - forex currency exchange

Description

The FOREX pip is the smallest denomination that a currency pair can move up or down. Pips are sometimes referred to as points, and, in fact, might be an abbreviation for percentage in point, although the exact origin of the word is a subject of debate. - forex currency exchange

Pips and Currency Pairs

Most currency pairs include four digits following the decimal point, and the last digit is the pip. However, Japanese currency pairs only include two digits after the decimal point, the second digit being the pip.

Exiting a Trade

Traders look at the pip to guide their trading strategy. Traders often have a targeted pip in mind so that they will be able to determine their proper exit strategy. - forex currency exchange

The Future of the Pip

Advances in electronic trading have paved the way for expanding the role of the pip in the currency market. Advancements included allowing trading to occur down to one-tenth of a pip. - forex currency exchange

Warning

FOREX trading can be risky. The best rule of thumb for traders is to not risk money they cannot afford to lose. - forex currency exchange

References

• BabyPips.com: Pips
• MGFOREX: What is Forex (Foreign Exchange)?

forex currency exchange