One of the first things to learn for those new in the trade Forex online market is how to read the Forex quote. The trade Forex online market deals with the trading of currency pairs. The key is that the currencies come in pairs; this is because the trade is really buying one currency with another currency. Each currency is written as three letters; for example, the U.S. dollar is written as USD, the Japanese yen as JPY, the Euro as EUR, etc. The Forex quote will then be given with the two currency pairs, like:
GBR/USD = 1.888 or USD/JPY = 111.11
The first example means that one British Pound (GBR) can purchase 1.888 U.S. dollars (USD) and the second example is saying that one USD can purchase 111.11 Japanese yen (JPY). So the order does matter for the reason that the first currency is the base currency and the second currency shown is the quoted currency – also called the counter currency. The base currency is always equal to one unit while the quoted or counter currency is the current equivalent value in the trade Forex online market.
It is possible to trade with an available currency pair with trade Forex online from most anywhere in the world and at any hour, though most currency pairs utilized for trade Forex online include the USD. It is possible to trade with a currency pair that does not involve the USD, these currency pairs are called “cross currency”.
The main reason to use “cross currency” trades is it offers more opportunities. This is because that the USD is the most global currency and when the USD is strong, it is usually strong against all other currencies; the reverse being true as well, when the USD is weak, it is usually weak across the board. So a currency trader can have more opportunities with “cross currency” trades when they do not like the USD trends or stagnation.