Here is a list of first-hand information for those who are starting in the trading and who want to learn very quickly.
-There are 7 major currencies on the forex. The Pound Sterling (GBP), Dollar (USD), Euro (EUR), the Yen (JPY), Swiss Franc (CHF), canadian Dollar (CAD) and Australian Dollar (AUD). The Yuan is likely to become a currency of the first plan in the next few years.
-The major currency pairs are EUR/USD, USD/JPY, GBP/USD, USD/CAD, USD/CHF, and AUD/USD. But by far, this is on EUR/US as the largest trading volumes. This pair is the most liquid and therefore offers the yield spread (commission that takes the broker when you place a trade lower.
-The GBP/USD is often called the «cable» so that USD/CHF is often called » suissy «. The Swiss Franc (CHF) is considered as a currency » safe haven «. In other words, traders buy the CHF in the face of other currencies when there is turbulence on the markets, and that investors have less appetite for risk. One of the reasons is that Switzerland is a country very stable. Its reputation of neutrality is another. Here is the list of nicknames of major currency pairs :
-Aussie : Nickname for the Australian Dollar
-Cable : Nickname for GBP/USD
-The Greenback : Nickname for the US Dollar
-Kiwi : Nickname for the new Zealand Dollar
-Loonie : Nickname of the Canadian Dollar
-Swissie : Not the Swiss Franc
-Some currencies are » commodity currencies «. That is to say that they are the currencies of countries exporting a lot of raw materials. These currencies, such as the Australian Dollar, Canadian and new Zealand or the Norwegian kroner are sensitive to changes in the prices of raw materials
-For other currencies, what are the interest rates that are very important. If you can predict the trajectory of interest rates correctly you can predict the trends on the forex.
-The trends last long enough on the forex. The weakness of the Dollar, for example, has persisted for several years.
-When you are trading a pair, you need to evaluate the economies of the two currencies in question by including parameters such as the amount of these governments to borrow and spend (and at what rate).
-The forex market is massive, highly liquid and very sensitive to events. The movements in forex are caused in large part by central banks. It is thus necessary to closely monitor their press conferences. There’s nothing better to a beginner than to look at the important conferences of recent years on the part of central bankers. You can find them on the websites of the central banks. The rate of inflation (and thus real interest rates), levels of debt, trade balances, unemployment rates, etc…
We will end this small introduction to the forex the next week. Don’t forget that you can go far back in time in our TRAINING category to find an abundance of articles in which you’ll find many good tips.