HOW TO BUYING AND SELLING CURRENCIES IN FOREX

 

to day i want to explain you  about buying and selling currencies okay now forex trading is a simultaneous buying of one currency and selling of another and currencies are quoted and traded in pairs civil broker right now let's take the european robo in the united states dollar for example or even the british pound in the japanese yen right when you trade in the foreign exchange market you buy or sell in currency pairs right this is very important for you guys to understand now imagine each currency pair constantly in a tug-of-war with each currency on its own side of the road this is what that would look like and an exchange rate is the relative price of two currencies from two different countries right and the exchange rates fluctuate based on which currency is stronger at the moment now i want to take the time to go over the different categories of currency pairs with you all right here you have your major pairs and major pairs always include the united states dollar okay then you have your cross pairs and cross pairs do not include the united states dollar okay i repeat cross pairs do not include the united states dollar and what are minor pairs right you have your minor pairs crest pairs that involve any of the major currencies these are known as minor pairs all right so if you hear me refer to a pair as a major or a cross or a minor now you'll understand what i'm referring to what about those exotic pairs what are exotic pairs greg well exotic pairs consist of one major currency and one currency from an emerging market okay so here are some of your major currency pairs i'm not going to go through all of them but take a look get familiar right these are your major currency pairs remember the majors are the most liquid in the world and i'll go over a little bit um about what liquidity is in just a moment liquidity is the term that's used to describe the level of activity or money in the financial market okay let me go over that liquidity is used to describe the level of activity activity or money in the financial market  what is traded in forex right the simple answer to that question was money right and here we are money it popped up again right so remember this when it comes to liquidity this is super important i can't stress this enough but when we get to the charts right this is when you're really gonna have to start paying attention to where liquidity is in the market okay so again liquidity is used to describe the level of activity or money in the financial market now in the foreign exchange market it's based on the number of active traders buying and selling a specific currency pair and the value that's being traded right the more frequently a currency pair is traded the higher its liquidity right does this stuff make sense to you i hope it's making sense for you guys now let me give you an example more people trade the euro usd currency pair and at higher volumes than the aud usd currency pair right now this is this is just generally speaking right because euro usd is probably the most heavily traded pair in the world it includes two of the most or largest economies right the european union in the united states so again more people trade the euro usd currency pair and at higher volumes than aud usd currency pair but what does that mean well this means that euro usd is more liquid than aud usd there's more liquidity in the euro usd market than there is in the aud usd market does that make sense so here are some of your cross currency pairs again i'm not going to go through all of these but definitely take a look get familiar because we're going to be utilizing these pairs going through these pairs and it's important for you to understand especially when we get to the chart you're going to want to understand what the different pairs are are we using a major pair are we using a minor pair we're using an exotic pair or a cross pair right and these are some of the other crosses now here are some of your exotic currency pairs right usd czar right that's the south african rand right usd mxn that's the mexican peso right and so on and so forth now exotic currency pairs are made up of one major currency in one currency from an emerging economy like south africa mexico thailand singapore and chile and it's not unusual to see spreads that are bigger than that of any major currency pair when it comes to these exotic pairs