welcome once again on this series we'll be talking about what is traded in the Forex markets and how to trade the Forex market like all that have been said from the previous series the first market is all about trading of currencies and specifically is trading these currencies in pairs and so Forex trading involves the buying of one currency and selling another simultaneously and it is done specifically in currency pairs so what is a currency fair it is a quotation of two different currencies and by this means a trader is allowed to buy or sell one currency against the other and so here's an example of the currency pair we have the hero us the first currency to be on the pair from the left to the right is a hero and this is the base currency and the second currency which is the us dollar is a quote currency so on the left hand side we have the bid price which is the selling price and on the right hand side we have the divine or axe price as we go further in this series we see how to calculate the pips but for now the difference in these two prizes are two pips the pepsi is calculated from the fourth number of that decimal point and when you make the differences between 1.0994 which is the buying price or the x price minus 1.0992 which is a big price you get the defense of two points which is a peep we have several categories of currency pairs we have the majors the courses and we have the exotic currency first so what are the major currency pairs the major currency players always include the us dollar and they are the most frequently traded coincidence in the market so these are the examples of the majors and they include the euro us dollars the us dollars japanese yen great britain's pounds u.s dollars the u.s dollar swiss franc the us dollar canadian dollars the australian dollar u.s dollar and the new zealand dollar u.s dollar pairs so these are the major and most liquid currency assets in the world they are called majors and they are frequently traded by 2005 and compared to the courses and the exotics the price moves more frequently with the majors which provides more trading opportunities secondly we have the crosses and across currency pairs do not include the us dollars however while they are not as frequently traded as the majors the courses are still pretty liquid and still provide plenty of trading opportunities to traders in the markets but the most actively traded courses are those are derived from the three major non-u.s currencies which are the euro the japanese yen and great britain pounds these are the three major courses that are more traded and are referred to as the miners and therefore in the table below we have the three different types of courses the euro courses the yen courses the pound crosses and other courses and so the next on our item we have the exotic currency players the exotic currency is a currency from countries with developing or emerging markets so therefore the exotic currency pairs involve one major currency compared with the currencies of an emerging economy and the examples of these emerging economies are brazil singapore mexico and so on and so forth and in recent times they have proven to be a fast-growing economy which can be profitable also for traders in the forex market but keep in mind that the exotic pests are not as heavily traded as the measures or crosses and so the transaction costs associated with spares are usually bigger so they cost more in terms of transactions and because of low degree of liquidity these players tend to be far more sensitive to economic and geopolitical events for instance a political scandal can cause an exotic player to swing violently so if you want to trade these exotic players always remember to factor this in your decisions and how do we trade the first market there are two basic ways to trade the first market you can go long or you can go shut going long certainly means buying in the market and going short simply means selling in the market so a long trade is a buy trade for instance if we go along with the hero usd pair we are simply buying the view against the us dollar and on the other hand if we go short that means we are simply selling the hero against the usd dollar so basically you can trade the price market by either going long or going shut whichever way you choose to be based on your analysis so how do we calculate peeps there are two variant ways of calculating pips based on the currency pairs for every currency pair that does not involve the japanese yen the first unit of peep is always the first number after the decimal points and for the currency pair that involves the japanese yen a unit of pip is always the second number after the decimal point as you can see on the screen so for the hero usd whereby our selling price is 1.136.1 our units of pip is 30 as it has been shaded because it is the fourth number after the decimal point and for buying price which is 1.13641 our units of pip is 4 which is the shaded number because it's also default number after the decimal point so for the currency pair involving the jpy we have here usd jpy and the selling price is 113.82 and 2 is our first unit of p because it is the second number after the decimal point as we have shaded here in the diagram and for its buying price which is 113.83 the grid is also the first unit of peeps for the buying price because it is the second number after the decimal point as we've shaded also so i've been knowing your units of beeps knowing your 10 pips 100 pips and a thousand pesos won't be a difficult thing to do because from your units of peeps you can trace your 10 pips your 100 pips and your thousand pips for instance for the euro usd if 30 that we have shaded is our units of peeps the nearest number which is 6 is a 10 speed and the flowing number which is 3 is 800 pips and then 1 after the decimal point is a thousand pips so this is how you calculate your pips from units to tens to hundreds and to thousands so this is the end of this series we've talked about what is traded in the foreign market
BELOW CHART IS SOME OF MAJOR CURRENCY PARIS
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