Online foreign exchange occurs in real time. Exchange rates are changing constantly in intervals of seconds. Therefore, an online Forex system operates in real time. That means that quotes are accurate and defined at the very moment they are displayed, and in ten seconds or less, a different rate may be quoted. Also, when a user locks in a rate and executes a transaction, that transaction is immediately processed and the exchange has been executed.
DEFINITION OF REAL TIME EXCHANGE RATE
Real time exchange rate is a form of speculation in which a trader bets on the movement in the exchange rates of foreign currency pairs. It deals with placing an order to buy or sell a particular currency pair at the current exchange rate.Real-time currency trading is fully electronic, the execution speeds are extremely rapid, allowing the trader to quickly buy and sell currencies to cut losses and take profit.Below are some major terms to take note in real time exchange rate.
1. CURRENCY PAIR:
A currency pair is the pricing and quotation structure of the currencies traded in the forex market.The worth of a currency is a rate and is determined by its comparison to another currency. The foremost listed currency of a currency pair is known as the base currency, and the second currency is called the quote currency. The currency pair determines how much of the quote currency is needed to purchase one unit of the base currency, if the base currency is purchased, and implicitly sell the quoted currency. The bid (buy price) represents how much of the quote currency you need to get one unit of the base currency.
2. ELECTRONIC CURRENCY TRADING:
This is a method of trading currencies via an online brokerage account.This program allows for the quick conversion of currencies, that is changing the base currency to a foreign currency at the market exchange rates through an online brokerage account. The traders use analysis based on fundamental signals to assist in forecast the progress of the currency pair being traded. As a result of currency trading through this medium is totally computerized, execution rate is fast, this allows traders to quickly buy and sell currencies to reduce losses and make profits at a moment's notice.
3. HISTORICAL CURRENCY EXCHANGE RATES:
This is a collection of historical exchange rates that are used to provide traders with a historical reference to where a currency pair has traded in the past. Historical currency rates are used by different forex traders to help shed light on the direction of a given currency pair.
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.