Learn More About Automatic Forex Trading Currency Pairings

Learn More About Automatic Forex Trading Currency Pairings When speaking with those who haven't tried automatic forex trading before, even if they come from the world of stocks, bonds, or futures , it always reminds me that sometimes even the most basic foundational elements of this global powerhouse of a market have to be explained . So let's take a good look at pairings, what they mean, and what the main and cross pairings happen to be .

Currency pair. What is it? Let's start with the Eur/Usd this has as the base currency the US dollar against the Euro . What is the meaning of the pari when I have a price quote that is 1.3200 on the Eur/Usd? To remember this answer the easy way, do this: take the base currency pair , which is the US dollar in this case , look at the price quote of 1.3200 , and then say , "it will take 1.3200 US Dollars for me to buy 1 Euro ." This is what that price quote really means. Maybe you look a few weeks later at the price quote and it's become 1.4000 then that means the US Dollar as gotten weaker against the Euro since to buy one Euro you now need 1.4000 US dollars . Of course , if you find the price quote is 1.2500 down the road, then the US dollar has gained strenght because you'll only need 1.2400 US dollars to purchae a Euro.

Automatic forex trading can become even more challenging when for the Usd/Jpy pair you see a price quote that is 100.50. Using the above method , simply take the base currency of Jpy and look at the 100.50 price quote and that is how many Jpy it will take to buy 1 US Dollar . Pretty easy huh ? Now you will have no difficulty understanding the price quote on any pair when you see a quote window or chart screen .

Since you know can read price quotes , what are the main and cross pairs ? Well the main pairs are usually the strongest economies throughout the world versus the US Dollar . A few of these pairs are Eur/Usd, Gbp/Usd, Aud/Usd, Usd/Cad, Usd/Jpy, and Nzd/Usd . A cross pair is a pair not involving the US Dollar which includes the Gbp/Jpy and the Eur/Jpy to name a couple that are popular.

Hopefully this brief article will be helpful to you if you've been feeling intimidated the automatic forex trading landscape in the past . You may need a bit of time to get used to this with all the time zones, economies, and currency pairs out there. After you start understanding how everything falls together it really is not too hard - and many of us think it's actually quite fun !

David F Dacosta - Is a private trader using technical analysis to do automatic forex trading & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.