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The foreign exchange market is not just for currency conversions for holiday makers but is actually a financial market much like the stock exchanges.

Anyone who has previously had to buy a foreign currency for a trip abroad will tell you that the currency rates differ from day-to-day so keeping up-to-date and using a currency calculator will grant you to stay ahead of the curve and get the most for your money. The currencies are displayed using the three letters that indicate the countries they represent, for example converting pounds to euros would be GBP/EUR where the Great British Pound is the base currency as this is the one you want to change. This base currency, also sometimes referred to as the domestic currency or primary currency, is always a single amount of the particular currency for example £1, $1 etc and is rarely actually displayed as a number as it is expected that as the number does not change regardless of currency, people will be aware of it without the actual number. The latter currency is referred to as the quote currency or occasionally the counter currency and is how much of that currency you can buy for 1 unit of the base currency.

The four most favourite currencies traded both as a way of generating profit and also amongst holiday makers are: Read more

If you want to trade the Forex market, the ideal way to do so is to learn how to read the price action on a plain vanilla price chart. This means, no indicators, no software, or anything else of the sort. The very first thing you should do as you learn to trade forex,is obtain a solid understanding of the uninhibited price action on a “naked” price chart.

Why is it so important to comprehend price action though? Well, for starters, price action is the “core” of any financial market. The movement of price crossways time is the end result of all global economic news events. So, by learning to interpret this price movement, we are learning to interpret the most important view of any market, which is its core price data.

There is no more important piece of any market than its price. The price of a given stock, commodity, or currency is a reflection of its current supply and demand situation, and the movement of price is the most important analysis tool we have as traders. However, many traders overlook the obvious and forgo making price action strategies their primary analysis tool. They instead use lagging indicators, trading software, or other price-derived analysis tools to try and predict market direction. Read more