currencies
USD = US dollar
EUR = Euro
JPY = Japanese Yen
British pound = pound sterling
CHF = Swiss Franc
CAD = Canadian dollar
AUD = Australian dollar
NZD = New Zealand Dollar
Currency pairs are the basis of forex trading. The foreign exchange market is where one country’s currency is traded for another country’s currency. Forex is always traded in pairs. There are six major currency pairs in the forex market:
EUR/USD = “Euro”
USD/JPY = “Yen Dollar”
GBP/USD = “cable” or “pound sterling”
USD/CHF = “Swiss”
USD/CAD = “Canadian Dollar” (the Canadian dollar is referred to as the “Loonie”)
AUD/USD = “Australian Dollar”
NZD/USD = “Kiwi”
With statistical trading tools that determine the strongest or weakest individual currency against all others, you can choose to trade the strongest currency against the weakest currency. EUR-USD is the most popular and has the largest transaction volume. Statistics show that 70% of transactions in Forex are made on EUR/USD. It is flagged by InterBanks and central banks also called market makers. Personal traders like you and me are “small fish” in the forex trading pool. If you analyze your trades, you immediately know if the best trade at that time was indeed the EUR-USD currency pair or another pair.
Now that you know which pairs you want to trade. The unit or price used in trading is called a pip, and it is the smallest increment in price a currency can achieve. Also known as pips.
The standard unit size of a transaction is a lot. One standard lot equals 100,000 units of the base currency, or 10,000 units if it is a mini account (a type of trading account), or 1,000 units if it is a mini account (a type of trading account). Some dealers offer the ability to trade in any unit size, down to just 1 unit.