What is forex & how is it traded?

• Forex is the buying of one currency and selling of another concu concurrently. rrently.
Currencies are quoted in pairs such as EUR/USD. The major curren currencies are
es EUR (Euro), GBP (British Pound), JPY (Japanese Yen) and the CHF (Swiss
Franc) – and they are traded against the USD.
• The first listed currency is known as the base currency, while t the second
he currency is called the counter or quote currency. The base currecurrency currency is the
ncy "basis" for the Bid price (the cost of selling the base currency currency) or the Ask
) price (the cost of buying the currency). For example, if you Ask EUR/USD
you have bought Euros (and simultaneously sold dollars). You wou would do so in
ld expectation that the Euro will appreciate in value relative to t the US dollar. FX
he is traded in lots, which represent 100,000 units of the base cur currency. If the
rency. EUR/USD is quoted at 1.2253, that means that one Euro is current currently worth
ly just over $1.22. If the market moves from 1.2253 up to 1.2254 th that represents
at a move of one pip. A pip is the smallest increment a currency pa pair can move
ir and in the case of the EUR/USD currency pair a pip is worth $10 in a 100K
account and is $1 in a mini account.