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Academy

How to understand the forex quote? | Z Academy

15.How to understand the forex quote?

In the forex market, exchange rates are given in currency pairs. The most important concept to understand this quote is “the relative value of the two currencies.” For example, in the currency pair EUR/USD, EUR is called the base currency and USD is called the quote currency.

What are currency codes and symbols in Forex? | Z Academy

16.What are currency codes and symbols in Forex?

In the forex market, each currency is uniformly represented by three English letters. This is actually a set of currency codes, ISO 4217, an international standard developed by the International Organization for Standardization to denote currency names. At the international trading level, ISO codes are used by people for the convenience of quotation, reading, communication, etc. Banks and corporations around the world also use currency codes, and it’s not hard to see banks publish each currency exchange rate by using currency code rather than any translated name or currency symbol.

What are the Major Currencies and Minor Currencies | Z Academy

17.What are the Major Currencies?

Currencies that are frequently traded and commonly seen in the forex market are called “major currencies”, based on the volume of global transactions. According to the Bank for International Settlements (BIS)2019 statistics, the most commonly traded currencies, from the highest volume to the lower, are US dollar, Euro, Japanese Yen, British Pound, Australian Dollar, Canadian Dollar, Swiss Franc, Chinese Yuan.

How to Calculate Leverage? How Leverage Related to Risk ? | ZFX

19.How to calculate leverage?

Most of the online forex transactions are carried out by margin trading. In this article, we explain how leverage works in trading.

Why Use Leverage? Pros and Cons of Margin Trading | ZFX Academy

20.Why use leverage?

The use of leverage is derived from margin trading. It comes from the fact that both the buyer and the seller deposit “margin” as a guarantee to fulfill the contract in the future. Since margin is mostly calculated as a proportion of the contract size amount, that proportion is the “leverage concept”.

What is Market Liquidity in Forex? | Z Academy

21. What is overnight interest?

Overnight interest is a term commonly used in online forex trading. Rollover, swap fee, overnight funding, in fact, all refer to the same thing. Generally, if the investor has an open position at 5 PM EST (summertime), there will be the overnight interest “cost” as settlement occurred. Such “interest” includes the “rate differential” of that trading product (currency pair) as well as the financing cost of the trading platform.

What is Spread and Pip? Different between Basis Point & Pip | ZFX

22.What is Spread and Pip?

In the forex market, the smallest unit used to quantify the movement in the currency quote is called “a pip”, and the difference between the bid-ask prices is called “spread”.

What is a Pip Value and Why is Pip Floating? | ZFX

23.What is a pip value?

Once you’ve looked at the idea of “pip” in forex trading, you should also pay attention to the value of each pip, so-called pip value. Because forex trading involves different currency pairs, investors will find that the profit and loss for each pip of some currency pairs are different from those of others. Therefore, it is necessary for investors to calculate the actual profit and loss per pip more accurately before the trade order placing, in order to avoid strategies mistaken.

Why do the Spreads Sometimes Become Wider or Narrower? | ZFX

24. Why do the spreads sometimes become wider or narrower?

“Spread” refers to the difference between the bid and ask price of a currency pair in forex trading. The widening or narrowing of the spread is directly related to the cost of investors in the trades. This cost is not paid directly, but is hidden and latent. When the spread is wide, investors may not be able to buy or sell at the best market price regardless of whether they enter or leave the market. In other words, it is a cost that affects the room of profit of investors.