forex trading quotes

forex trading quotes

If you’ve had an interest in FOREX, taken a look at the quotes, and run away, don’t feel bad. Many other people do the same thing. FOREX quotes are, at best, confusing. But it is vital that you understand how to read those quotes before you start investing in FOREX.

forex trading quotes

There are numerous factors that affect the price of a currency. Events, economic conditions, and political situations seem to have the largest affect on those prices. It seems that everything matters. In fact, a government can control the price of their currency by either flooding the market with the currency, or by buying a great deal of their own currency to lower or raise the current price of that currency.

Fortunately, for FOREX traders, the FOREX market is too extensive for any government to control a price for very long. This makes FOREX one of the safest and fairest investments available. Each currency is given a three letter code, which you will see when you are looking at FOREX quotes. For instance, the US Dollar is represented by USD, the European Euro by EUR, the United Kingdom Pound by GBP, the Australian Dollar by AUD, the Japenese Yen by JPY, the Swiss Franc by CHF, and the Canadian Dollar by CAD.

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In FOREX quotes, the prices are given in pairs of currencies. A currency pair is two different currencies, such as the USD and the EUR, represented as USD/EUR. In this example, the USD would be the base currency, and the EUR would be the quote currency. For example, USD/EUR = 0.8591. This means that one US dollar will cost 0.8591 Euros.

forex trading quotes and sayings

If the pair was the opposite way: EUR/USD = 0.8591, it would mean that one Euro would cost 0.8591 US Dollars. If the quote currency rises, it means that the base currency is becoming stronger, or worth more. If the quote currency drops, it means that the base currency is becoming weaker – worth less.

FOREX quotes are given in bid and ask prices. The bid price is the price that a buyer will pay for the base currency, in exchange for the quote currency. The ask price is what the sellers are willing to sell the base currency at, in exchange for the quote currency.

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There are major and minor currencies, and major currency pairs, as follows: GBP/USD, EUR/USD, AUD/USD, USD/JPY, USD/CHF, and USD/CAD. You may see cross currency charts as well, which show several different currencies, such as this:

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USD CAD EUR GBP USD 1.01285 1.36050 0.98735 0.46578 CAD 0.70808 1.00000 0.57756 0.36759 EUR 1.29140 1.48105 1.00000 0.57699 GBP 1.76985 2.29080 1.67984 1.00900
When viewing such a chart, the currencies listed across the top are the quote currencies, and the currencies listed on the left are the base currencies. You can form pairs from this currency chart as follows:

USD/CAD = 1.36050

USD/EUR = 0.98735

USD/GBP = 0.46578

From this, you can see what the US dollar is worth in various different currencies. Because there is no standard for cross currency charts, it is necessary to already know what one currency pair is, so that you can determine how to read the chart.

forex trading quotes