Written by ForexCult Team
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Forex In the following article, I would like to take the time to tell you about forex quotes. At first, when you are reading a quote in relationship to foreign exchange, it may seem to be a little confusing. However, if you take the time to remember two things you will find that it is quiet simple. The first thing that you need to remember is that the currency that is listed first in the pair of currencies is referred to as the base currency, the second thing that you need to remember is that the actual value of the currency that is listed first is known to always be one. Because of the fact that the United States Dollar is normally the centerpiece of the actual forex market you will find that it is the USD that is considered as the base currency for many of the quotes that you will see in the forex market. When you are first starting out with forex trading you may not think that forex quotes serve that much of an importance but that is only because you are new to forex trading because in reality forex quotes are everywhere when it comes to forex trading and you are going to have to learn forex quotes so that you are able to be successful. Forex and the Majors When it comes to the majors you will be able to see that the USD is actually the base currency for example you will have the United States Dollar which is placed up against the Japanese Yen which will look like this USD/JPY. One thing that you should keep in mind is that just like with the forex majors there are many other currencies where you will notice that the actual forex quotes are shown as an actual unit of one USD in relationship to the currency that is listed second in the pair. If you see that there is a time when the USD is the base unit and the currency quote has risen, it means that the USD has grown in value and the other currency has weakened. However you will find that there are three main exceptions to this individual rule. The first exception is the GBP or the British Pound and the second exception is the AUD or the Australian Dollar and the last exception is the EURO or the EUR. When you have these are three currency pairs and the USD is actually not the actual base rate, you will see that there is a rising forex quote which means that the dollar is weakening and that it is going to take more of the United States Dollars to amount to the other currency. So in other terms you will find that if you have a currency quote that rises higher that the actual base currency is the one that is increasing in value. If you have a lower quote that will show that the base currency is weakening. Forex Bid and Ask When you are a trader and you are trading forex, you will often take notice of a two sided quote which is normally going to consist of a bid as well as an ask. In relationship to the bid in the forex quote you will see that the bid is the actual price that you can sell the currency that is referred to as the base currency while at the same time you are purchasing the other currency that is known as the counter currency. In relationship to the ask you will see that it is the actual price that you can purchase the individual base currency at which you will be selling the counter currency at the same time as well. At this point and time you may be thinking that all of this is not important to you as a trader but in all actuality, it really is. Forex quotes are the main part of forex trading and if you do not understand the forex quotes and you do not know what each currency is and what each currency means then you will be the one that suffers from all of the consequences of not knowing. If you have read this article and you are still not sure about the forex quotes, then you need to talk to someone that can help you to understand them or you need to get online and take a look at some of the information that is on the web that relates to forex quotes. Forex Overall Forex overall is not hard to learn, yes there is a lot of different types of information that is currently out there about forex however, if you take the time to sit down and read the information you will learn that the forex information is not that hard to understand. However, you are going to have to remember that learning about forex is the overall importance when it comes to trading forex so all of the information that you are able to get your hands on in relationship to forex needs to be read until you have a firm grasp on it. This doesn’t mean that you have to sit and read the forex information over and over all it means is that you need to read the forex information until you can honestly say that you understand it. The best way to learn information about forex is to break each set of information that you get into sections. For example if you are learning about forex quotes then put all of that information in one group, if you are learning about trading forex then put all of that information into a group. You want to do this until you are able to have each section categorized so that you do not confuse your self anymore than you are already.