Trading In Forex Market
In this article, we will try to tell you how to make Buy / Sell transactions in Forex Markets. We will give you some information about Forex market entry and leverage transactions.
What is the quotation on the Forex Market?
The currency on the left is the “base” or “base” currency. The currency on the right is the “variable” currency. The tattoo on the right is also called the “foreign exchange” or “the price is determined” currency.
Example: If the brokerage house has quoted USD / CHF as 1.1525 / 1.1535, we can sell 1 US Dollar at 1.1525 Swiss Francs and 1 US Dollar at 1.1535 Swiss Francs. In general, US Dollar is accepted as the base currency in the transactions; however, when quotation against the Euro is made, the Euro is considered as the base currency and the quotation is made accordingly.
In international markets, the ratio between two currencies, both of which are not US dollars, is known as cross currency. For example; Euro / Yen, Euro / CHF, Buy Price = 1.33449 – Selling Price = 1.33467. The lower price (e.g. 1.33449 in our example) is the selling price, and it specifies the price you want to sell for your base currency (in this case Euro) versus the variable currency (in this case US Dollar). In short, you will sell 1 Euro against 1.33449 USD.
The higher price (for example, 1.33467) is the purchase price, and it specifies the price you want to buy for your base currency (Euro) variable beating (USD). In short, you will receive 1 Euro against 1.33467 USD transactions. In other words, if you want to make a long position to buy, you will do it at the price of 1.33467 in our example.