Currency Business

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If you want to start jumping into foreign exchange (forex) trading, you need to know few things. Besides checking Currency / Business News regularly, these are some information to start. The first is the instruments traded in the market. There are always a pair of currencies traded, for example Euro and USD.

The trader takes a position buying Euro and hoping for appreciation. The pair of Euro and US Dollar indicated as EUR/USD. The other common pairs are GBP/USD (Great Britain Pound and US Dollar), AUD/USD (Australian Dollar and US Dollar), USD/JPY (US Dollar and Japanese Yen), and USD/CAD (US Dollar and Canadian Dollar.

If you use the EUR/USD, it means the Euro is the base currency, and USD is countered to imply the price of the pair, or is called cross currency.

Price Interest Point (PIP) is the smallest incremental change of the pair.

There is also trading method using indicator like RSI (Relative Strength Index). Trading using rsi forex indicator can help traders to enter the market at the right timing.

A margin call can happen when the trader allows the balance in the trading account to go below the margin deposit percentage agreed upon with the broker. The broker will automatically sell your long positions or buy your short positions and clear the entire trading account, returning the margin amount to the trader to protect the trader from losing more money than they have.