Here we came to the third lesson. From here, things get trickier, and this is where the true learning begins! We have learnt about the Forex market. The main thing in the financial market is money. First let’s learn what are the currencies are using in the forex market. It is enough to identify what these currencies are for Forex trading.
Now we know that we are dealing with foreign currencies. But all currencies are not using in the Forex market. Only the currencies of the most powerful countries in the world are used in the Forex market. Because of that we have very little to keep in mind. Let’s see what are currencies of countries that using in Forex.
Countries that are using strong currencies
- United States of America
- England (United Kingdom)
- Europe
- Japan
- Canada
- Australia
Right now you know what are the countries. Now let’s see what currencies are using in these countries. But we use these currencies in three English letters in the Forex market; Let us see what they are.
| Country | Type of currency used | Use of Forex |
|---|---|---|
| United States | United States Dollar | USD |
| United Kingdom | Great Britain Pound | GBP |
| Europe | Euro | EUR |
| Australia | Australian Dollar | AUD |
That’s all we need to know. There is nothing to be afraid of. As time goes on, these just get used to. There are about 44 currencies in the Forex market. But we don’t want them all. I have put all the things we need on the grid above. That’s enough for you.
How Currencies are used in the Forex market
Now let’s see how these currencies are use in the Forex market. We do not have to look at these separately in the Forex market. We can see those as a pair of currencies. Because we are talking about two currencies in here. There must be two currencies to exchange currencies. Can you remember I told you in the previous article that we have to give 0.7 Euro to get 1 dollar. In here we are talking about the value of the dollar against to the Euro. So we can’t say this with just one currency. There must be two types of money. We call this as a currency pair. This currency pair shows as EUR / USD in Forex.
Now you understand what a currency pair is. We can make currency pairs with every currency. In Forex we divide these currency pairs into two parts.
1. Major currency
2. Minor currency
Major currency means main currency pairs. That is for the currencies in which USD is used. Minor currency refers to sub-currency categories. That is, currencies without USD. I will show you the difference between these two.
| Major currency | Minor currency |
|---|---|
| EUR/USD | EUR/GBP |
| GBP/USD | GBP/JPY |
| AUD/USD | AUD/JPY |
| USD/JPY | EUR/JPY |
Now we can see the difference between these two. That’s all we have to learn about money. We only use Major currency to trade in Forex. These are very easy things to understand. There are just few things to keep in mind.
We will meet up in the next lesson. Those who have questions can ask. send me a message via Face Book.
Next Article – How to make money from Forex
Like us on Facebook – Wini Forex
Follow us on Instagram – Wini Forex
