Since currencies are traded in pairs and exchanged against the other when the negotiations, the rate at which they are traded like currency. Most currencies are traded against the U. S. Dollar (USD). The four most commonly traded currencies are the euro (EUR), Japanese yen (JPY) British pound (GBP) and Swiss franc (CHF). These five currencies make up the majority of the market and are called major currencies or "major". According to some sources including the Australian dollar (AUD) in the group of major currencies.
The first currency exchange pair is referred to as the base currency and the second as the counter or quote currency. The counter or quote currency is thus the numerator of the ratio, the base currency is the denominator. The value of the base currency (denominator) is always 1 Therefore, the exchange rate tells a buyer because the counter or quote currency to pay for one unit of base currency. The exchange rate also tells a seller what is contained in the counter or quote currency when selling one unit of base currency. For example, an exchange rate of EUR / USD from 1.2083 to the buyer that the euro is 1.2083 USD must be paid to 1 euro.
At any time and place when an investor buys any currency and immediately sells - and does not change the exchange rate has occurred - the investor will lose money. The reason is that the price was, as it is in conflict with the quote or sell a currency when a unit of base currency is always less than the asking price, which, as to pay over the counter or quote currency to buy a unit currency basis. For example, EUR / USD bid / ask at your bank may be 1.2015/1.3015, representing a difference of 1000 seeds (also called points, one pip = 0.0001), which is much higher than the bid / ask currency rates that online Forex investors commonly encounter, such as 1.2015/1.2020, with a spread of 5 pips. In general, smaller spreads are better for Forex investors since even a small movement in exchange rates in order to benefit from an exchange.
The first currency exchange pair is referred to as the base currency and the second as the counter or quote currency. The counter or quote currency is thus the numerator of the ratio, the base currency is the denominator. The value of the base currency (denominator) is always 1 Therefore, the exchange rate tells a buyer because the counter or quote currency to pay for one unit of base currency. The exchange rate also tells a seller what is contained in the counter or quote currency when selling one unit of base currency. For example, an exchange rate of EUR / USD from 1.2083 to the buyer that the euro is 1.2083 USD must be paid to 1 euro.
At any time and place when an investor buys any currency and immediately sells - and does not change the exchange rate has occurred - the investor will lose money. The reason is that the price was, as it is in conflict with the quote or sell a currency when a unit of base currency is always less than the asking price, which, as to pay over the counter or quote currency to buy a unit currency basis. For example, EUR / USD bid / ask at your bank may be 1.2015/1.3015, representing a difference of 1000 seeds (also called points, one pip = 0.0001), which is much higher than the bid / ask currency rates that online Forex investors commonly encounter, such as 1.2015/1.2020, with a spread of 5 pips. In general, smaller spreads are better for Forex investors since even a small movement in exchange rates in order to benefit from an exchange.
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