FX Pairs

The pairs most commonly traded are:

• EUR / USD, the Euro vs US Dollar
• USD / CHF, US$ vs Swiss Franc
• GBP / USD, British Pound vs US$
• USD / JPY, US$ vs Japanese Yen
• USD / CAD, US$ vs Canadian Dollar
• AUD / USD, Australian Dollar vs US$

These couples represent 80% of all trades in the forex market. They all involve the American dollar, because it is still the largest economy in the world and one of the most inviting to trade. But it is also a Bretton Woods Agreement of 1944, pegged to the whole of the American dollar currencies as a reference. Although the agreement was abandoned in the early 1970’s, some of its effects are still evident on the market.

The first motto of the pair is known as the base currency, and that is the important thing. Its value is always one of the exchange rate, and it controls the direction of trade and the card. The second motto is called the cross. Because a purchase automatically includes two currencies, one being exchanged for another, it is also possible to make a profit in a bear market as a bull market. For the same reason, there is no ban on short selling Forex trading as there is in the stock market, it is built into the system.

The prices are measured in seeds, which is an acronym for Point of Interest Rates, and it is the smallest figure in the price. This is important, because all the seeds are created equal, that they reflect the base currency of the pair. If the dollar is the base currency, then a pip is equal to one dollar in a mini account or ten dollars to a standard. If you place an exchange with one of these currencies and win fifty seeds, it would be a benefit of $ 50 for a mini account or $ 500 in a standard.