What is Currencies Trading?
Currencies are generally recognized units of currency representing a quantity of a country’s exports or imports. In technical terms, currency conversion rates between countries occurs when a country’s domestic monetary unit is converted to the foreign monetary unit. A typical currency in this sense is currency in any shape, form or legal tender when in actual use or circulation, particularly circulating coins and banknotes. There are various types of currencies. Among the major ones are the US dollar, the British pound, the Euro, the Japanese yen and the Swiss franc.
The most commonly traded currency pairs in foreign exchange markets include the US dollar against the British pound, the Euro against the Japanese yen, the Swiss franc against the Euro and the Australian dollar against the Australian dollar. Currencies are traded on global marketplaces like the New York Board of Trade (NYSEBOT), the London Brokerage Commission (LBCC) and the Australian Securities Exchange (ASE). The major trading centers for Currencies are the New York Board of Trade and the London Commodities Market (LCM). On the other hand, the Forex market, the largest global exchange, handles the trades for currencies across the globe. For a trader, a foreign exchange market is a place where they can buy and sell currencies based on current market values and then converting the same into their national currency. A forex trader needs to be proficient with the use of the computer and internet in order to make successful transactions.
Currencies are an asset class because the value of a single currency, in the whole world, moves almost in a straight line. You can think of a currency trading system as being like a car that moves from point A to point B. There are three factors that affect the movement of the foreign exchange market: supply, demand and the psychology of the market participants.