Niche Research and Marketing

The Basics of Reading a Forex Quote

Newcomers can be baffled by the foreign exchange market and one source of confusion is the forex quote. This small bit of information contained in the forex quote is packed with numbers that may not make sense to unfamiliar eyes looking at this information. Here is a basic explanation of how it works.

A forex trade always involves the selling of one currency and the buying of another. It also contains a bid price and an asking price. A quote might look like this, USD/JPY 118.71/75

What exactly is this number USD/JPY118.71 is actually shorthand for two numbers 118.75 The first USD the base currency the value of the base is always 1 in this case $1 US dollar, the formation states how many of the quote currency , the Japanese yen JPY , you can buy with $1 US dollar.

The 118.71 is the bid price or selling price and the 118.75 is the buying price. So according to this example you can sell $1US dollar for 118.71 Japanese Yen or you can buy $1 US dollar for 118.75 Japanese Yen.

The spread is the difference between the bid price and the ask price and each unit is called a pip . In our example the spread for USD/JPY is 4 pips. For the most commonly traded currencies the spread is usually small. Some spreads may even be as small as 1 pip due to the competition in the trading market.

Less commonly traded currencies will have a greater spread but even the smaller spreads will mount up when you are dealing with hundreds of thousands of units.

Related articles by Zemanta

• Investors seek safe haven in dollar (money.cnn.com)
• Understanding currency ETCs (blogs.reuters.com)
• Dollar falls to 14-year low vs yen, touching 86.51 (sfgate.com)
• Foreign Exchange (FOREX) Currency CDs (bargaineering.com)

Related site

Stocks

ebay

amazon

Trading Games, 16x20in. $65.00 Trading Games captures the language and gaming spirit of the financial markets. The original screen print series by ex- US Treasury Bond Trader, Jill Jeannides, reflects her years in the trading pits at the Chicago Board of Trade from 1993-1997. This serigraphic print playfully explores global market interdependency, revealing the dynamics of complex, elusive financial instruments....

Trading Games, 16x20in., Color: Parchment $65.00 Trading Games captures the language and gaming spirit of the financial markets. The original screen print series by ex- US Treasury Bond Trader, Jill Jeannides, reflects her years in the trading pits at the Chicago Board of Trade from 1993-1997. This serigraphic print playfully explores global market interdependency, revealing the dynamics of complex, elusive financial instruments....

Trading Games, 20x24in. $80.00 Trading Games captures the language and gaming spirit of the financial markets. The original screen print series by ex- US Treasury Bond Trader, Jill Jeannides, reflects her years in the trading pits at the Chicago Board of Trade from 1993-1997. This serigraphic print playfully explores global market interdependency, revealing the dynamics of complex, elusive financial instruments....

A Beginner's Guide to Short Selling with Toni Turner $19.96 Fear short selling no more. Toni Turner will take you step by step through the process of selling short. Her systematic top down approach shows you how to pick the right stocks for selling short and it will prove to you that selling short is not as difficult or as scary as you may think. Additional topics covered include; how to use candlesticks to identify short selling candidates, how the conve...

FOREX Trading Using Fibonacci and Elliott Wave $77.95 Let acclaimed forex trader Todd Gordon give you his FEWL system in this new course, and you will be positioned to identify the strong, trending relationships between currencies to repeatedly grab profits trade after trade. In one of the most informative and entertaining courses given by any trader, you will gain: -Simple, ready to use explanations of Fibonacci and Elliott Wave theory and app...

How Kroll Traded $18K Into $712,789 In Futures! $14.97 Stanley Kroll was one of the greatest futures traders of the last century. He was also a kindhearted philanthropist who refused to be swayed by other trader's opinions. In this must see DVD Doc Brown carefully analyzes Kroll's futures trading strategy that allowed him to trade $18K into $712,789 in a few short years. If you're starting as a futures (or forex) trader or a veteran with lukewarm r...

pro cordless trimmer with charging stand $79.00 powerful ,With cord/cordless operation cutting heads this is a truly versatile trimmer, Cordless trimmer with charging stand built for high performance trimming. The ergonomic handle with soft grip gives you total comfort and control in use for necklines,hairlines,sideburns,beards,mustaches and eyebrows. 30mm detachable stainless steel blade. include. 2 combs 1/4inches and 3/8 inches...

MGE UPS Syst. TRANSFORMER MOD FOR-EX RT 5KVA 7KVA 11KVA ( 86211 ) $2,530.00 The Eaton EX 11 RT Transformer (formerly marketed under the MGE Office Protection Systems brand and now part of the Pulsar series) is a high density, rackmountable step-down transformer and PDU designed for plug-in connectivity of low voltage devices connected to a EX 11 RT UPS. It shares the same slick design as the rest of the EX RT family to form a robust solution for IT environment with a comb...

High Probability Trading Strategies: Entry to Exit Tactics for the Forex, Futures, and Stock Markets (Wiley Trading) $39.97 In High Probability Trading Strategies, author and well-known trading educator Robert Miner skillfully outlines every aspect of a practical trading plan–from entry to exit–that he has developed over the course of his distinguished twenty-plus-year career. The result is a complete approach to trading that will allow you to trade confidently in a variety of markets and time frames. Written...

Day Trading For Dummies $13.55 Day trading is undoubtedly the most exciting way to make money from home. It's also the riskiest. Before you begin, you need three things: patience, nerves of steel, and a well-thumbed copy of Day Trading For Dummies—the low-risk way to find out whether day trading is for you. This plain-English guide shows you how day trading works, identifies its all-too-numerous pitfalls, and get yo...