The basic principle of Forex trading is all about buying foreign currencies at a lower price, and selling them off at a higher price to make profits. There are various market conditions which cause the values of foreign currencies to keep changing at every minute.
The most profitable strategies in trading with foreign currencies hit the best times of making profit. These are aimed at taking full advantage of the market value fluctuations of the traded currencies.
The currencies that most traders love
Knowing the basics of the forex trading industry of course requires that you first find out what all currencies are circulated in the market.
The forex trading industry is abuzz with many different currencies of various nations. The ups and downs in value of these are what keep this market going. These are actually the assets that a forex trader has got.
Every guide to the forex market must mention all of the most popularly traded assets.
The group that is known as “Forex majors” comprises of five of the most popular world currencies – the US Dollar, the Pound Sterling, the Euro, Japanese Yen and Swiss Franc.
Apart from these five currencies which form the majors of the forex market, there are three more foreign currencies that are commonly traded. The Canadian Dollar, New Zealand Dollar and Australian Dollar are highly popular choices among the forex traders.
When you pair each of these three currencies with the US Dollar, the “Forex minors” group is created.
Now there is some basic feature about pairing of all these currencies. The “cross pairs” are those currency pairs that do not couple with the US Dollar, like, GBP/JPY, EUR/GBP, CHF/GBP and some others.
All other pairs of national currencies, doing their rounds in this market, are referred to as the “Exotic pairs”. These exotic pairs make up less than 10% of the overall foreign currency transactions in the market.