Forex trading is having many career opportunities as it is easily accessible by traders from all around the world. Currency trading is also used to denote forex trading. It is about being your own boss and making money with proper knowledge about worldwide currency exchange.
What Is the Forex Market?
Trading in currency pairs using the rates determined by the foreign exchange market is known as currency trading or forex trading. Traders buy and sell currencies at the determined currency exchange rate. When a trader sees any profitable opportunities, forex transactions are executed. Sometimes currency exchange is also currency exchange toronto mandatory.
What Is a Pair in Forex?
Forex trading requires currency pairs for trading. A pair indicates how many units of quote currency can be bought and sold against one unit of the base currency. A base currency is a currency that is listed first in a pair and a quote currency is listed second in a pair.
Traders cannot trade using only one currency, two currencies are important for trading in the foreign exchange market. The currency pairs are also classified into three different categories that are:
Minor Pairs
Minor pairs are also known as cross currency pairs and these pairs involve currencies of strong economies. They are less liquid pairs of the foreign exchange market.
Major Pairs
The currency pairs in this category include the US dollar against other currencies of strong economies across the world. These are highly liquid pairs of the foreign exchange market.
Exotic Pairs
These currency pairs are made of currencies of emerging economies. Their liquidity is very low in the foreign exchange market.