Can I start forex with $100?
The aim of forex trading
is simple. Just like any other form of speculation, you want to buy a currency
at one price and sell it at higher price (or sell a currency at one price and
buy it at a lower price) in order to make a profit. Some confusion can arise as
the price of one currency is always, of course, determined in another currency.
For instance, the price of one British pound could be measured as, say, two US
dollars, if the exchange rate between GBP and USD is 2 exactly. In forex
trading terms this value for the British pound would be represented as a price
of 2.0000 for the forex pair GBP/USD. Currencies are grouped into pairs to show
the exchange rate between the two currencies; in other words, the price of the
first currency in the second currency. Some commonly traded forex pairs (known
as ‘major’ pairs) are EUR/USD, USD/JPY and EUR/GBP, but it is also possible to
trade many minor currencies (also known as ‘exotics’) such as the Mexican peso
(MXN), the Polish zloty (PLN) or the Norwegian krone (NOK). As these currencies
are not so frequently traded the market is less liquid and so the trading
spread may be wider.
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