Trading nothing: When you trade with currencies you are actually trading with nothing as there is no physical exchange with trade mainly conducted by means of computer entries and automatically netted depending on market price. This market type is used purely for buying and selling-no long term investing. The purpose of the market is to help conversion of currencies for international trading corporations who have to constantly trade currencies.
What's the difference?: Foreign exchange trading is different in that transacting is conducted over-the-counter with other members. No formal clearing is done by Clearing Houses and a simple credit agreement is used to secure payment and delivery of currencies. The market is actually very casual with little or no formalities and basic regulations. Options, Futures and stocks on the other hand are traded on regulated and formal exchanges.
Top currency pairs: International liquid currency pairs are the preferred choice with some traders trading in exotic currency's such as Czech Koruna's just to be different and a little reckless. The most liquid and popular trade pairs are Dollar/Yen, Euro/US Dollar, US Dollar/Swiss Franc and British Pound/US Dollar. Variation pairs are also available such as New Zealand Dollar, Australian Dollar/US Dollar and US Dollar/Canadian Dollar.
Common gibberish: As with any profession a secret language is spoken by currency traders when referring to certain market items or occurrences such as Swissie referring to Swiss Franc, Yard is one billions units, Figure is round number such as 1000 and Sterling the other name for British Pound.
Smallest movements and times: The smallest movement in foreign currency pricing is known as a pip. In the determination of losses or gains, drops and rises in pips are used as indicators. Just a couple of pips can mean a huge fluctuation. Pip values are different for small and regularly sized accounts being US$ 1 and US$ 10 respectively. The pip difference between bid and asking price is known as spread. Small time lapses between two currencies are known as ticks. - 23204
What's the difference?: Foreign exchange trading is different in that transacting is conducted over-the-counter with other members. No formal clearing is done by Clearing Houses and a simple credit agreement is used to secure payment and delivery of currencies. The market is actually very casual with little or no formalities and basic regulations. Options, Futures and stocks on the other hand are traded on regulated and formal exchanges.
Top currency pairs: International liquid currency pairs are the preferred choice with some traders trading in exotic currency's such as Czech Koruna's just to be different and a little reckless. The most liquid and popular trade pairs are Dollar/Yen, Euro/US Dollar, US Dollar/Swiss Franc and British Pound/US Dollar. Variation pairs are also available such as New Zealand Dollar, Australian Dollar/US Dollar and US Dollar/Canadian Dollar.
Common gibberish: As with any profession a secret language is spoken by currency traders when referring to certain market items or occurrences such as Swissie referring to Swiss Franc, Yard is one billions units, Figure is round number such as 1000 and Sterling the other name for British Pound.
Smallest movements and times: The smallest movement in foreign currency pricing is known as a pip. In the determination of losses or gains, drops and rises in pips are used as indicators. Just a couple of pips can mean a huge fluctuation. Pip values are different for small and regularly sized accounts being US$ 1 and US$ 10 respectively. The pip difference between bid and asking price is known as spread. Small time lapses between two currencies are known as ticks. - 23204
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