Important Information on How FXCM Currency Pairs are Done

Intriguingly, there seems to be so much interest in FXCM currency pairs from traders and customers alike. Well the truth is that there are some things that need to be learned about these currency pairings.  It does come as a surprise though that some people in the foreign exchange currency trading industry still need to learn more about this topic.

FXCM Currency pairs defined

Before going any further, first is that the definition of FXCM currency pairs must be arrived at. So with that, a currency pair is defined as a pricing and quotation arrangement of all the foreign currency being traded in the in the foreign exchange currency trading market.  Here the value of at foreign currency is compared to another currency being traded in the same foreign exchange currency market.

In Plus500 foreign exchange trading, a currency pairing appears like this “___/___” where the first currency is defined as the base currency and the last currency is defined as the quote currency.  What this formula shows is how much quote currency is needed to purchase a single unit of a base currency.

Learning more about iForex Currency Pair

The main thing that one must know in trading foreign exchange currency is that when trading a currency pair, a trader buys a currency and sells another all at the same time.  This is what iForex traders have been doing and it has reaped them so much success. From the sound of it it seems very easy since the pair itself can be treated as one single entity. This is how simple as it goes – a trader buys the base currency and at the same has the quote currency sold.  The amount of the quote currency needed to buy one unit of the base currency is dependent on the bid price.  On the other hand, if a trader decides to sell the pair of currency, he will have to sell the base and buy the quote.  This time, the number of quote currency a trader will get will be dependent on the ask price at which a single unit of the base price will be sold.

To best describe everything written above about FXCM currency pairs, if this appears in front of you, USD/EUR, this is called the U.S. dollar – Euro currency pair.  A quotation of this pair would normally appear like this – USD/EUR = 1.5. An Xtrade trader then purchases the currency pair which means that whenever the trader sells 1.5 EUR, he receives or gets a dollar.  On the other hand, if the trader sells the currency pair, he will get 1.5 EUR for every dollar that he gets to sell.

Now if you switch the FXCM currency pairs around, EUR/USD, the price would come out to EUR/USD = .667.  $.667 would get the trader 1 EUR.

The currency pairings operation is very easy to understand. The only thing confusing at times is the amount of numbers involved.

Truth be told, it is also important to know the currency pairings and how it operates.