Forex Market is known as currency market. Where number of currencies can trade but in pairs. The profit calculated in pips or we can say currency might be moves around approximately 50 to 100 pips a day. Here, pip is a minimum amount which denotes the last four points after decimal.
Example – price of the EURO/DOLLAR is 13.2340 then it turns into 13.2370. The movement between 40 to 70 is known as pip movement. Overall profit will be calculated like this – suppose you buy $2000 Dollars and each pip moves around $ 0.10 through your overall profit will be – 2000 x 0.10 = $ 200. Your profit will vary as per your investment
Market Timing – Unlike stock market, forex market works 24 x 7. It opens every Sunday at 5:00 PM and closes 5:00 PM Friday.
Number of Currency Pairs one can make in forex market – United States ( DOLLAR), European Currency ( EURO), Japan’s Currency (YEN), Switzerland’s currency ( SWISS FRANC), Canada’s Currency (Canadian Dollar), Australia’s Currency ( Australian Dollar ), New Zealand ( New Zealand Dollar).
What is pairing of Currencies and why it’s needed?
Currency market works on this pairing system where one currency makes a bid on another country’s currency. Suppose, there is a trade between YEN / EURO – The base currency will be YEN and EURO will be the Quote Currency. Pairing is important because without this trade cannot be possible.
Why selective countries are there?
There are few countries with which we can make a pair for currency trading because only these countries are the largest market or a strong presence in financial markets in the world. Moreover, the price of the currency is also high and the chances of growth are also there. These countries are on top as they are performing well and have a lot of business.
Tips – know the market first – Don’t do hurry to enter into the market. Sit back and have look of the market first – more you take the knowledge the more you achieve your goals. Don’t think like this that you are wanting your time by taking information. With less information if you jump in then surely you will face losses and lose your Morale too. Have a look about forex market, what exactly currency pairs is , how profit can be calculated, which type of indicators one should have to use, leverages, Margins etc. After proper information about the market, it’s time to enter into it but, start with fewer amounts.
Remember all the points before entering into the market and make your journey Simple and hassle free.