What am I buying and selling in the forex market?

Hi,i'm new to forex and just want to know what exactly am i buying or selling in the forex market?

Hi Majekodunmi, if you are still that young in forex, plz refer to [You must be registered and logged in to see this link.]

"If you love it, you will give it your all"

hi,majek,buying and selling currencies are done in pairs.but u can ask,why are currencies traded in pairs? What makes up a currency pair? How can you tell what a currency pair is worth? And exactly what currencies easily trade in pairs so you can invest in them?

This is important to know - because once you understand currency pairs (like the USD/JPY or EUR/USD), you can start trading in the foreign-exchange market, if that's your goal. So let's dig right in.

Why are currencies traded in pairs?

Currencies are traded in pairs because you only know what a particular currency is worth when you relate/compare it to another currency. That's how you can tell if a currency is strong or weak. For example, you could only tell the value of the Swiss franc in terms of how many euros will buy you a Swiss franc, or how many dollars will buy you a Swiss franc.

What makes up a currency pair?

Currency pairs have two parts, the "base currency" and the "quote currency." The base currency is the first currency listed in the pair. The quote currency is listed second. And you can tell what the pair is worth by how much quote currency a base currency is worth.
For example, if you look at the pair EUR/USD, the euro is the base currency and the U.S. dollar is the quote currency. And by looking at this pair, you're trying to determine what a euro (the base currency) is worth in dollar terms (the quote currency).

How can you tell what one is worth?

First of all you can look at a graph, a quote screen or a website that tracks currencies. Any place you look, they will list the currency pair as a fraction or decimal. It's showing exactly what the base currency is worth in relation to the quote currency.
For example if you looked at the EUR/USD and it said "1.59," that would mean that 1 euro is worth US$1.59. If you were looking at a chart, it would show you how the euro is strengthening in relation to the dollar.

What Currencies Trade in Pairs?

USD = U.S. dollar
EUR = Euro
GBP = British pound
JPY = Japanese yen
CHF = Swiss franc
CAD = Canadian dollar
AUD = Australian dollar
NZD = New Zealand dollar
SGD = Singapore dollar
HKD = Hong Kong dollar

Now that you have the basics, are you ready to place your first trade?

Many newbies to the currency markets get a little confused by the actual market itself. And it's completely understandable considering foreign-exchange trades are NOT placed on the New York stock exchange like regular stock trades (unless you're buying and selling currency ETFs).

Instead, currency pairs trade on the completely separate foreign-exchange market - also known as the forex market, or spot market (because currencies literally trade "on the spot").

One of the major benefits of currency trading is how often the market is open for business. As you probably know, stock markets around the globe open and close each day. But if you're trading currencies, you can literally trade 24 hours a day, 5 days a week . Let me explain.

Technically, a trading week in currencies starts in Asia around 7:00 pm EST on Sunday night, and then ends at 4:00 pm EST on Friday afternoon in New York. During that time the spot market trades worldwide, 24 hours a day. (Please be warned: Your broker may have slightly different trading times, but these are a good guide.)

Typically, there isn't any trading going on during Saturday or the earlier part of Sunday. However, on a rare occasion, there can be a few rare trades that place somewhere in the world, just not through any of the major markets most retail traders would use.

Tokyo Trading: Generally from 7:00 pm EST to 4:00 am EST
London Trading: Generally from 3:00 am EST to 12:00 noon EST
New York Trading: Generally from 8:00 am EST to 5:00 pm EST

So you can say that forex trading mainly occurs about 5.5 days a week, 24 hours a day during those times.

As you may have noticed, there are overlap times. That means you can trade pairs with both sessions in common.

For example, 8:00 am EST until 12 noon EST can be a great time to play the euro vs. the dollar (EUR/USD). You'll have more volume because it happens to be the time when both European and American traders are placing their trades. That can help you be more nimble in buying and selling this particular trade.

Knowing little tricks like this can help when you start buying and selling currencies like the pros do - one trade at a time.

Look as you are new to forex, i hope you have a basic knowledge of forex, because it is necessary to clear your concepts first. for that i suggest first you watch some instructional videos on internet you can find them easily on internet. Once you are sure, you can start your trading. Be careful as you are in deal with currencies, best of luck

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