In the Forex market there are a number of fundamental terms you need to be aware of that may be different than what you may be used to if you have traded stocks or futures before. Though some terms may be the same, others are completely different. Be sure you do not take this for granted and review each so you don’t have any surprises.
Relationships and Value:- If you have traded anything before, the fundamentals of trading currencies are basically the same. You exchange one item of value for another item of value. In essence you are buying something and selling something else. So, as we mentioned before, where you may have bought 1 share Microsoft stock, you are really Buying 1 share of Microsoft (MSFT) and selling “x” amount of US Dollars to purchase it. The ticker symbol for that could actually be “MSFT/USD” instead of the more common “MSFT”. So for any currency you are simply relating one currencies value to another, like the Euro’s value compared to the US Dollar (EUR/USD), or the US Dollar’s value compared to the Japanese Yen (USD/JPY).
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