Before we delve any deeper into the possibilities that exist in the Forex market we need to go over some basic Forex market terms
Pip A pip percentage in point or point is usually the smallest unit of measurement in the Forex market Most currency pair quotes are carried out four decimal places—ie 14500 When you work with Alpari quotes are carried out to the 5th decimal place to provide better pricing The 5th decimal place represents fractional pips If the exchange rate of a currency pair moved from 145000 to 145100 we would say that the price moved up 10 pips You make money when the pips move your way in a trade
Note Any exchange rate that contains the Japanese yen as one of the currencies will only be carried out three decimal places
Currency Pair We wouldnt have a Forex market if we werent able to compare the value of one currency against the value of another currency It is this comparison that drives prices Forex contracts are always quoted in pairs The Euro vs the US dollar EURUSD is the most heavily traded currency pair The US dollar vs the Japanese yen USDJPY is another popular pair
The following is a list of the most common currency pairs their trading symbols and their nicknames
Euro vs US dollar EURUSD The Euro
Great Britain Pound vs US dollar GBPUSD Pound Sterling or The Cable
US dollar vs Swiss franc USDCHF The Swissie
US dollar vs Japanese yen USDJPY The Yen
US dollar vs Canadian dollar USDCAD The CAD or Loonie
Australian dollar vs US dollar AUDUSD The Aussie
New Zealand dollar vs US dollar NZDUSD The Kiwi
