WHAT IS

FOREX MARKET?

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WHAT IS FOREX?

Forex stands for foreign exchange. it’s also referred as FX or currency

market. This is a place where exchange of one currency can be done in

lieu of another such as buy US Dollar for Euro.

Buying and selling can be done for each currency pair. Trades can be

executed through a broker through a trading platform. 50 percent

transactions take place in US and UK market. Mostly traded currency is

US Dollar against different currencies all over the world.

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CHARACTERISTICS OF FOREX MARKET

World’s largest trading market

Works 24*5 starts on Monday in Sydney and ends on Friday in New York

Daily turnover amounts to $6 trillion approximately

Almost 9/10th part of trades taking place are in speculation market

Most effective and liquid market

Participants – financial firms (Banks, Hedge funds, Mutual Funds) Investors

Major markets – US, UK, Europe, Australia, Japan, Hong Kong, Singapore

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Resource: Wikipedia

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SYMBOL COUNTRY CURRENCY

USD United States Dollar

EUR Euro zone members Euro

JPY Japan Yen

GBP Great Britain Pound

CHF Switzerland Franc

CAD Canada Dollar

AUD Australia Dollar

NZD New Zealand Dollar

CURRENCIES & SYMBOLS

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CURRENCY PAIRS & NICKNAMES

CURRENCY PAIR NICKNAME

EUR/USD Fiber

USD/JPY Yen

GBP/USD Cable

USD/CHF Swissy

USD/CAD Loonie

AUD/USD Aussie

NZD/USD Kiwi

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BASE CURRENCY AND QUOTE CURRENCY

EUR-USD1.3345

BASE CURRENCY QUOTE CURRENCY

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ASK RATE & BID RATE

EUR-USD1.33451.6690/1.6691

GBP-USD

BID RATE ASK RATE

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APPRECIATION

Price quoted against any pair talks about base currency Chart goes up so as the base currency

E.g.

GBPUSD

1.6650

1.6640

Appreciation

(Pound Appreciated against US Dollar so as US Dollar depreciated against Pound)

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DEPRECIATION

Chart goes down so as the base currency E.g.

EURUSD

1.3350

1.3340

Depreciation

(Euro depreciated against US Dollar so as US Dollar appreciated against Euro)

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MEASUREMENT

Pips and Big figures Most of the currencies are traded in four digits after point(.) EURUSD-

1.3350 Japanese Yen is exception Last two digits are pips and first two digits are big figures

E.g.

EUR USD1.3456

BIG FIGURES PIPS

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