Free forex quotes are expressed differently compared to other financial markets like the stocks, futures, etc. With a forex quote, a traders is looking at the exchange rate between two different currencies (especially the ones that make up a currency pair), not just one currency as is the case with other markets. So forex quotes, as expressed for the purpose of forex trading, are all about the exchange rate between two different countries.
As important as forex quotes may be in forex trading, traders are willing to pay a fortune just to get their hands on these quotes and make the best of it in their trades. However, considering a lot of things, forex quotes are provided for free to the public. Forex companies, forex sites, and financial organizations take it upon themselves to keep the public updated about forex quotes and exchange rates at no cost at all. Since forex quotes can be accessed free of charge, it is important that traders understand these quotes before applying them to their trades.
HOW TO READ A FOREX QUOTE
If you get a forex quote for free and you really do not know how to make use of it, there is tendency that you will produce undesirable results from your trades. Understanding a forex quote means you can put a free forex quote to good use.
- CURRENCY PAIR EXPRESSION:
The very first thing traders should know about a forex quote is ho w to interpret a currency pair. There are two currencies in a currency pair, both of which are compared to each other in the process of trading. The first currency in a currency pair is known as the base currency, while the second one is known as the quote currency.
- THE PIP:
A pip (which stands for point in percentage) is the standard unit for calculating profits and losses in forex trading. In a free forex quote, currency pairs are expressed in four decimal places. The fourth decimal value is what is referred to as a pip in forex trading.
- FOREX CHART:
There will be no forex charts without forex quotes. Forex charts are made of forex quotes in a graphical form representing the exchange rates between currencies. As is the nature of the forex market, exchange rates differ from time to time, and the chart is the medium that shows how the exchange rates of currency pairs have changed over a period of time.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.