One of the most difficult things for newcomers to the forex to wrap their heads around is how to read currency-pair quotes. After all, most of us are used to seeing one price for items-a loaf of bread costs $1.89; a stock sells for $39.50 per share, etc. But in these cases, we are exchanging one currency-U.S. dollars-for physical goods. Buying one currency with another one can be a real headscratcher, but this article will hopefully allay some of your confusion.
How Currencies Are Traded
Currencies are traded in currency pairs. For example, a common currency pair is the U.S. dollar (USD) and the Japanese yen (JPY), expressed as USD/JPY. A quote for this currency pair might look like this: USD/JPY 116.01/05. This indicates a 116.01 bid price (the first number) and a 116.05 ask price (replace the final two digits of the first number with the number appearing after the slash).
The bid price tells you how many units of the counter currency (the currency listed after the slash) you can obtain for one unit of the base currency (the currency listed first). In this example, you could obtain 116.01 Japanese yen for one U.S. dollar. The ask price tells you how many...
To view and download this full PLR article, you must be logged in. Registration is completely free. Once you create your account, you will be able to browse, search & downlod from our PLR articles database of over "1,57,897+" on 1,000's of niches and 200+ categories without paying a penny. Click here to signup...
