Knowledge is a fundamental necessity in everything we do in life, including forex trading. The need for the most recent information about the forex market can single handedly foster greater profit for a trader. The forex quotes is a daily check-in forex traders; it helps them make decision as to what to trade and how to trade it. Investors must know on time about the pair they are trading (or intend to trade), and that information must be accurate. Talking about accuracy, what better way is there to produce accurate and timely information asides the internet. The provision of online forex quote through the internet is a basic necessity in the forex market.
WHAT IS ONLINE FOREX QUOTE?
A forex quote is the relative value of a forex unit against the unit of another currency in the foreign exchange market. An online forex quote is simply a forex quote that is live online. The online forex quotes makes it easier for money to be changed from one currency to another at the right rate. Displaying these quotes live online saves a lot of time and reduces shortcomings in transactions.
UNDERSTANDING ONLINE FOREX QUOTES
Displaying forex quotes online and live is one thing, understanding the quotes and applying them correctly is another thing entirely. The ability to read a forex quote is an important skill all traders must have.
Currency quotes are always in pairs made of two different currencies – for instance
To read a forex or currency quote, here are some things a trader should know
- The first currency is the base currency, and the second one is the quote currency. Here is an example to further illustrate this point
USD/CAD – USD in this case is the base currency, while CAD is the quote currency.
- The base currency is always equal to one unit while the quote currency is equal to the value of a unit of the base currency.
For instance, USD/JPY = 120
This means that USD1 can buy JPY120.
- To buy a base currency or a currency pair, the dealer’s selling price is known as the “ask price”; while the “bid price” is the price the trader is willing to accept for the currency pair.
There is more to reading a forex quote, interpreting them, and applying them correctly. However, the few tips listed above are enough to get any newbie going in trading the forex market. Traders should also note that the forex quotes are ever changing as a result of the dynamic nature of the forex market.
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.