Trading Mechanics

Currency Pair Availability


Currencies for trading are always discussed in terms of ‘PAIRS’, such as EUR/USD or USD/JPY. The first currency
in the pair is referred to as the base currency, the second is known as the counter or quote currency. The base
currency is the "basis" for the buy or sell position. For example; if you BUY "EUR/USD" you will have bought Euros
trading against the USD.



The terms Buy / Sell are often interchangeable with Bid / Ask.


In FOREX trading, the currency quotations use abbreviations for currencies that are standardized by the
International Organization for Standardization (ISO) in standard ISO 4217.


The quotation EUR/USD 1.6100 means that one euro is exchanged for 1.6100 US dollars. If the quote changes
from EUR/USD 1.6100 to 1.6110, the euro has increased in relative value against the dollar, because either the
dollar buying strength has weakened or the euro has strengthened, or both. On the other hand, if the EUR/USD
quote changes from 1.6100 to 1.6000 the euro is relatively weaker than the dollar.


Currency pairs are often described and categorized into 3 groupings; Majors, Minors and Exotics.



Major Currencies Include: US Dollar (USD), Euro (EUR), the Japanese Yen (JPY), the British Pound Sterling (GBP), Swiss Franc (CHF) and the Australian Dollar (AUD), Canadian Dollars (CAD)

Minor Currencies Include: New Zealand Dollard (NZD), Dutch Krona (DKK), Turkish Lira (TRY), and more...

Exotic Currencies are ‘all the rest’

When trading commodities or indices, the instrument is not paired up, therefore if you buy or sell Crude Oil, then the more traditional market processes takes place. For example if you buy Crude Oil at $105 and sell at $115 the value and therefore profit will be $10

What are Technical / Fundamental Analysis?


In the world of FOREX, one of the most valued tools for traders is the Daily & Weekly Analyses. These reports are
available at many leading FOREX web portals and service providers together with brokers themselves who strive
to offer value to their client base through these important market information and data reviews.



Market Analyses is often categorized into two distinct categories: Fundamental Analysis and Technical Analysis.



A Fundamental Analysis is a way of understanding upcoming currency and commodity movements through an
analysis of local or global events and economic news; it is a forward-looking approach that provides traders with
a speculative review of the coming day or weeks trading opportunity.



The Technical Analysis is a process of analyzing the market through historic trends and using technical tools such
as statistic-based chart indicators (MACD, RSI, Bollinger Bands, etc.). It is a backwards looking analysis that starts
with the assumption that that future movements may behave in a similar fashion to historic movements.



By utilizing a combination of these past and future analyses it's possible for traders to assess the market
session and create or modify trading strategies accordingly. Forex signal providers will use these analyses when
creating signals, by subscribing to a signal provider, or social signal network it's possible to gain even deeper
understanding and speculation in how the market may move based on real traders activity.



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