How Forex Market Operate

Here first we need to know that, what is traded in FOREX Market? The simple answer in Money or Currency.

Because we are not buying anything in physical, Forex Trading can be confusing. Think of buying a currency as buying a share in a particular country, kind of buying share in a company. The price of the currency is direct reflection of the market’s opinion on the current and future health of it’s respective economy.

When you but Indian Rupee, you are basically buying a share in the “Indian Economy”. You are betting that the Indian Economy is doing well and will even get better as time goes. Once you sell those “shares” back to the market you will end up with a profit or loss.

The exchange rate of one currency versus other currencies is a reflection of the condition of that country’s economy, compared to other countries’ economies.

Major Currencies

As a new Forex trader, you must be interested to know the list of Major Currencies to start trading with.

USDUnited StatesDollarBuck
GBPGreat BritainPoundCable
NZDNew ZealandDollarKiwi
Why these listed currencies are called the “majors” because they are the most widely traded ones.

Currency symbols always have three letters. By 1973, the International Organization for Standardization (ISO) established the three-letter codes for currencies that we use today. The first two letters identify the name of the country and the third letter identifies the name of that country’s currency, usually the first letter of the currency’s name. These three letters are known as ISO 4217 Currency Codes.

Lets take AED for instance

AE stand for Aarab Emirates and D stands for Dirham. Hope it’s now easy to understand