We are asking a question to you, What Is Traded In Forex?
In simple terms, the answer is currency / MONEY.
Here you will buy and sell currency from one country to another. Since you are not able to buy any real product or service while trading in this market, many people may have reason to doubt about this market.
You can think of it this way, buying a currency means you bought shares in that country. It’s a lot like buying shares in a particular company. The currency of a country plays a direct role in determining the overall condition, economic stability, and potential economic stability of that country.
Meanwhile, if you buy a currency like TAKA means you have bought a share of Bangladesh’s economy. Which means, you are assuming that the economic condition of Bangladesh will be better than before, as a result, increase the value of the currency you have purchased in the past, giving you some profit.
For example, if the value of the currency of Bangladesh increases, then we should realize that the economic condition of Bangladesh has been much better than the international economic situation. And if the value of Bangladeshi Currency goes down, then we should realize that the economic condition of the country is worse compare to the international economic situation. In a word, the currency is an important way of measuring the overall improvement of that country.
In Forex trading, when you take a BUY entry for Japanese Yen, it means that you bought a ‘share’ of Japan’s entire financial system through Yen (their currency).
If you understand the different types of analysis, the economic situation in Japan will be much stronger than it is now, and at one point you will sell those shares in the market – that is, you receive your profit from there. Hope you understand this example.
Generally, the currency exchange rate of a country is determined based on the level of economy of another country.
When you finish this course you will understand different currency pairs and will get some idea about how to trade.
In the Forex market, you will get the benefit of trading in different types of currency pairs. However, as a new trader, we would suggest selecting only the major currency pair for trading.
One thing to always keep in mind is that a currency is represented by 3 characters. Where the first two letters represent the name of the country and the third letter represents the name of the currency of that country.
Can you tell us the currency of Bangladesh? It’s BDT. Here, the first two letters, namely BD, are abbreviations of Bangladesh and the third letter is T that represents the currency of Bangladesh. Isn’t it easy? Although many of us trade Forex but do not know what does the currency pair means. Nothing to worry about, we will not allow you to trade without increasing the scope of your Trading Knowledge.
To make it easier – the names of the different currencies are identified by three letters, where the first two letters are the name of that country and the third letter is the name of the currency of the country. As in the picture below –
In the box above the USD shown, the US is the United States and D means Dollar. Isn’t it so easy? We wish, form now if you see any currency code then you will understand which country it belongs.
The currency pair names you can see in the chart above are the MAJOR currency pairs, which are the most used for trading in Forex Market.
One is called Major Currency again under different names. For example, the most common name for USD is “BUCK”. But many still call this currency greenbacks, bones, Benji, benjamins, paper, loot, scrilla, cheese, bread, moolah, dead president, and cash money. Got worried! How do you remember so many names? Nothing to worry about, in forex trading the name will be “USD” only. For example, EUR/USD, GBP/USD, USD/JPY, etc.
Funny jokes: Do you know, in Peru, The dollar was called Coco, which was George Washington’s nickname, and on the $1 note, you can see his picture.