What are currency pairs and how to work with them
Every novice trader, coming to the Forex market or binary options, first of all comes across such a concept as currency pairs. It would seem that everything is simple, but it still remains unclear why currencies are combined in such pairs, and how the relationship between them occurs.
In order to successfully trade on the market, it is not enough to learn the basic terms and just remember them, it is necessary to understand the mechanism of the formation of these concepts, that is, why it happens exactly this way and not otherwise.
In this article, we will talk in detail about what currency pairs are, tell you what they are, and what benefit can be derived from knowing the mechanism for building these assets. Yes, such a seemingly simple concept is fraught with many nuances, which simply need to be dealt with.
For example, correlation. Not all newbies know that by tracking the behavior of one asset, it is possible to predict the behavior of another with a high degree of probability. Already interested? Then everything in order.
There are a lot of countries on the international currency market, and each has its own currency. For the convenience of searching, abbreviations common for all market participants were recognized.
Since there are a lot of countries, we will not list all of them, but we will give the main names of currency assets:
EUR is the single European currency.
USD - American dollar.
JPY - Japanese Yen.
AUD - Australian dollar.
GBP - British pound.
CAD - Canadian dollar.
NZD - New Zealand dollar.
CHF - Swiss franc.
These are the main market participants with the highest turnover, so they are most often found in pairs of currency pairs.
Conclusion
Currency pairs are one of the main areas of trading, both in Forex and in binary options. Stocks and indices account for a negligible percentage of speculators. So what is the secret of these tools? Probably in simplicity and convenience. In order to predict the behavior of stock prices, it is necessary to monitor the situation in the company, as well as monitor the macroeconomic background.
With currencies, everything is easier, and most brokers on their sites post analytics with an overview of currencies.
Unfortunately, trading in foreign exchange assets cannot guarantee one hundred percent success, since the market is initially associated with high risks, and the instrument plays a secondary role here.
In order not to waste all the money, you need to understand one truth - trading is a full-fledged profession that needs to be learned. Moreover, this profession is more difficult than many others, and not everyone can master it.