Ciphering the Forex Quotes

By:	ACM	14-04-2008
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In Ciphering the Forex Quotes the most important point to remember about the forex quotes is, if a currency quote goes higher it increases the value of the base currency and a lower quote means the base currency is moving down.

Decided to invest in the stock market and confused about the forex quotes. It really seems difficult to understand the forex quotes at first step but a foreign exchange quote is not as difficult as it appears to be. It’s mandatory to understand the forex quotes before you are going to make your first investment in the currency trading. To conquer the currency trading there are two important things to remember about the forex quotes:

• The first currency listed first is the base currency and

• The value of the base currency is always 1.

While trading forex, two-sided quotes come across, which consists of a bid and an Ask

Bid: Bid is the price at which one can sell the base currency

Ask: Ask is the price at which one can buy the base currency and at the same time selling the counter currency.

Foreign Exchange Trading Quotes Tips

• US dollar is considered as the 'base' currency for quotes. It includes USD/JPY, USD/CHF and USD/CAD in the majors.

• Combination of two currencies involved in trade is known as “cross”. USD/JPY means that the forex quote is valid for someone who wants to use United States Dollars to buy Japanese Yen.

• Quotes are generally expressed as a unit of $1 USD per the second currency quoted in pair. A quote of USD/JPY 120.01 means that one U.S. dollar is equal to 120.01 Japanese yen.

• When a currency quote goes up, it means that dollar has appreciated in value and the other currency has gone down.

• If the USD/JPY quote increases to 123.01, the dollar is stronger because it will now buy more Yen than before. British pound (GBP), the Australian dollar (AUD) and the Euro (EUR) are the three exceptions to the above mentioned rule. If a quote is GBP/USD 1.436 it means that one British pound equals 1.4366 U.S. dollars. In these three currency pairs, where the U.S. dollar is not the base rate, a rising quote means a weakening dollar, as it now takes more U.S. dollars to equal one pound, euro or Australian dollar.

• An important point to remember about the forex quotes is, if a currency quote goes higher it increases the value of the base currency and a lower quote means the base currency is moving down.

About Author

Forex is the largest market place of Currency trading. While currency trading in Forex Market or dwelling over currency market, one should mull over the present scenario and future prospects of the country, currency of which he is trading.

http://www.ac-markets.com

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DISCLAIMER:
Currency trading risk disclaimer The risk disclaimer is meant to inform the user of the potential financial risks of engaging in foreign exchange trading. The transaction of such financial instruments known as forex, fx, currency and dealt on a valued basis known as 'spot' or 'forward' can contain a substantial degree of risk. Before deciding to undertake such transactions with Advanced currency markets SA (herewith expressed as ACM SA) and indeed any other firm offering similar services, a user should carefully evaluate whether his/her financial situation is appropriate. Trading foreign exchange may result in substantial loss of funds and/or complete loss of funds and therefore should only be undertaken with risk capital. The definition of risk capital is funds that are not necessary to the survival or well being of the user. ACM SA bly recommends that a user considering trading foreign exchange products read through all the main topics contained in the ACM SA website so that he/she may obtain a clear and accurate understanding of the risks inherent to fx trading. Opinions and analysis on potential expected market movements contained within the ACM SA website are not to be considered necessarily precise or timely and due to the public nature of the internet, ACM SA cannot at any time guarantee the accuracy of such information. Trading on-line no matter how convenient or efficient does not necessarily reduce the risks associated with foreign exchange trading and ACM SA does not accept any responsibility towards any customer, member or third party acting on such information contained on the web site as to the accuracy or delay of information such as quotations, news and charts derived from quotations. Additionally ACM does not accept responsibility for any losses or lost trading opportunities deriving from interruptions in online communications or generally technical problems rendering ACM's dealing software unavailable. A physical telephone dealing desk is maintained 24 hours per day, Sunday to Friday as an alternative method of communication meant to service customers with their transactions should the online dealing software suffer any temporary interruptions. If you do not understand the risks involved in trading foreign exchange, do not trade it. If you need clarification you can contact customer support and an ACM representative can fully explain all the risks involved in making foreign exhange transactions.