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Forex and cryptocurrency Basics
(Know more about forex and cryptocurrency investment)

What is forex?

Forex is short for foreign exchange (sometimes abbreviated to just FX) and is the global, decentralized trading market of the world’s currencies. Traders, investors, banks and exchanges buy, sell and speculate on these currencies, and in turn this activity determines the foreign exchange rate.

What are currency pairs?

Forex is all about speculating on the fluctuating currencies between two countries. These two currencies are referred to as ‘currency pairs’ and they’re made up of the base currency and the quote currency. The most traded currency pair of all is the Euro against the US Dollar, which is normally presented as EUR/USD.

What’s a quote currency?

This is the second currency that appears in the pair, and is also known as the ‘counter currency’. In the example above, the USD is the quote currency.

How does forex trading work?

To trade forex is to buy and sell currencies – with the aim of making a profit. Forex trading will always involve two currencies at a time, the base currency and the quote currency. The difference in price is where you’ll make your profit or loss.

What’s a bid price?

This is the price that a trader is willing to buy a currency pair at. It fluctuates constantly.

What is a position?

A position is a trade which is currently in progress. In trading, you can get long positions and short positions:

  • Long position: this is when the trader has bought a currency with the expectation that it will increase. Once the currency is sold back, the long position is considered closed.
  • Short position: this is when the trader has sold a currency with the expectation that it will decrease. Once the currency is bought back, the short position is considered closed.
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