iForexTrader

WHAT IS TRADED IN THE FOREX MARKET

What-is-traded-in-the-Forex-market-300x364

The Foreign Exchange market commonly known as the Forex market is the most liquid market in the world. With a daily average turnover of $4 trillion, it is by far the most expansive global financial marketplace. The market comprises all global currencies and forex trading consists of purchasing one currency and concurrently selling another. Currencies are at all times traded in pairs of two, through dealers or brokers.

The most popular currencies traded in the forex market are those associated with governments that have robust and unwavering economies. First, the US dollar (USD), which is traded on over 85 percent of all trades while the second most popular currency,  the euro (EUR) is part of 35 percent of all transactions, closely trailed by the yen (JPY) with a 20 percent share. Other major currencies traded in the forex market are the British Pound (GBP), the Swiss Franc (CHF), the Canadian Dollar (CAD) and the Australian Dollar (AUD).

Major Currencies

Symbol

Country

Currency

Nickname

 

popularity

USD

United States

Dollar

Buck

Over 85%of trades

EUR

Euro zone members

Euro

Fiber

35% of trades

JPY

Japan

Yen

Yen

20% of trades

GBP

Great Britain

Pound

Cable

13% of trades

CHF

Switzerland

Franc

Swissy

6.5$ of trades

CAD

Canada

Dollar

Loonie

5% of trades

AUD

Australia

Dollar

Aussie

8% of trades

NZD

New Zealand

Dollar

Kiwi

Source: Babypips

What does it mean to trade forex?

The forex market allows the trader to see the price of a particular currency pair value and place a trade accordingly. Buying or selling a certain currency is an act of faith. For instance, when you buy, the Canadian dollar, you are investing in the Canadian economy. You are therefore confident that the Canadian economy will perform well and continue to show strong numbers. The goal of such an act of faith is to make a profit by selling the CAD at a higher price compared to the time of purchase. The quote price of the currency correlates with what the market thinks about the present and future strength of the Canadian economy.

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