Welcome to ForexSQ for learn forex trading free. Would you like to start trading with forex but feel like success depends on finding the alchemist’s stone? Do technical indicators, currency quotes, economic data sound like Merlin’s Book of Magic to you?
Forex trading comprises significant risk, and learning takings time. This course will come to be started and provide you a better understanding of the basics of currency trading. Our educational material will director you through the jungle of lots, pips and chart patterns and aims to introduce you to the marketplaces.
Our leading purpose is to accelerate the Forex learning process by supplying you the most valuable information in the simplest manner probable. With the power you’ll increase by the knowledge in these pages, you’ll be more ready to meet the marketplaces.
How to Read a Currency Quote
Forex trading is a method of commodity exchange. In the commodity market traders sell and buy assets like gold or oil in exchange for currencies. In the forex marketplace the assets sold and bought are currencies themselves. As a consequence, unlike in the commodity, all currency’s value is determined comparative to another.
For instance, when the currency trader purchases an ounce of gold, he must pay for it with the US dollar, which makes a quote in which the price of the metal is definite in terms of a currency which is a new asset class. On the other hand when the forex trader sells or buys the Euro, he must pay for it with another currency (Swiss Franc, Australian dollar, etc.) in which case the quote formed has the same asset class on both sides. The consequence of this is that it is impossible to speak of complete value in the forex market because it is probable to value the Euro in dollars, Yen, or Francs, each being a valid choice as a value indicator. In the case of commodities, or stocks, the value can only be indicated in USD; thus it is possible to speak of a complete value.
How to Read and Know a Currency Quote
Upon opening and downloading the software of your selected forex broker, the 1st concept that you will come across is the forex price quote. The quote is mainly the record of a previous transaction in which a currency pair changed hands. While 2 financial performers exchange currencies, the price at which the transaction happened is so-called a quote. Let’s see this through an example.
EUR/USD 1.3524
In the above quote, the money on the left side is the currency which was accepted by us, whereas the one on the right is the one that we sold to finance our buying. The number shows the value at which the currencies were traded. Or to put it in a simple and short mathematical form, when we bought one Euro, the value of one Euro was equivalent to 1.35 USD, and we had to pay that much to purchase the currency.
Upon performing the trade, we are at present short the dollar, and long the Euro, in either words, we have an open position. The opinion of profit in currency trading is the similar as in all other types of trading activity: to sell expensive, and to buy cheap is our purpose. Thus, we will wait for the value of the Euro to increase above 1.35, to for example, 1.38, where we will be capable to close our position by means of selling the Euro and purchasing back the dollars, and creating a profit. As our base currency is the dollar, our profit will moreover be measured in dollars.
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