Nowadays, trading currency in the foreign exchange market or forex is relatively easy with three account types specifically designed for retail investors, including the micro lots, mini lots, and standard lot. "Forex" is the short term for foreign exchange market, wherein currencies need to be exchanged in order to facilitate international trade and foreign business. For example, if a US citizen who wants to purchase an item from Japan, he should first exchange his dollars to yen before he is able to do so. Forex is said to be one of the most liquid markets worldwide with trades running as high as two thousand billion US dollars a day. First-time investors can get started with a micro account for only $50. If you are a first-timer, you need to equip yourself with the right knowledge about the forex trading australia market, and it will be a lot easier if you have been trading stocks online.
You have to know and understand the basic terms in the foreign exchange or forex market at rubixfx.com, including PIP, base currency, currency pair, cross currency pair, and quote currency. PIP is the acronym for Percentage in Point or Price Interest Point which is a very small measurement of change that a given exchange rate can make. There is varying value of pips for your trade depending on the size of your lot when you are trading, and spread refers to the difference in pips between the bid and ask. Since forex brokers do not collect an official commission, they make money through the spread. When your trade is in the positive pips, you are making a profit, but if the pip is in negative, your trade is under water. As an accounting currency or domestic currency, base currency refers to the first currency that is quoted in a forex currency pair. When it comes to cross currency pair, this is a pair of currencies traded in foreign exchange excluding US dollars. When it comes to currency pair, it refers to the pricing structure and quotation of traded currencies in forex, and the currency value is highly determined by its comparison to another currency.
Always remember that when you're engaged in forex, you are actually buying and selling currencies, and the action is being performed on the base currency. An example of pair trade is selling EUR/USD, wherein the trader is not only selling euros, but he is also buying US dollars. An example of forex is when GPB/USD rises from 1.5024 to 1.529, the GBP/USD has risen 5 pips which is a positive pip, and it means you are earning. Allow us to share more valuable information about forex by visiting our homepage or website today so you can learn the art and skills of foreign exchange trade for a more successful transaction every time! For further details regarding Forex Trading, go to http://www.ehow.com/how_6503240_start-forex-llc-company.html.