Free Forex Training Currency Pairings and What They Mean

When talking to people who have never tried free forex training before, even those involved in futures, stocks, and bonds , it always reminds me that sometimes even the most basic foundational elements of this global powerhouse of a market have to be explained . So let’s take a good look at pairings, what they mean, and what the main and cross pairings happen to be .

What is a currency pair ? We’ll begin with the Eur/Usd this has as the base currency the US dollar against the Euro . What is the meaning of the pari when I have a price quote that is 1.3200 on the Eur/Usd? To remember this answer the easy way, do this: take your currency pair base , which is the US dollar in this case , look at the price quote of 1.3200 , and then say , ” to buy 1 Euro it will take me 1.3200 US dollars .” This is what that price quote really means. Perhaps a few months later you check out the price quote and now it is 1.4000 this tells you that the US Dollar is now weaker when compared to the Euro since to buy one Euro you now need 1.4000 US dollars . Of course , if a couple months later the price quote is then 1.25000 , then the US Dollar has become stronger because you’ll only need 1.2400 US dollars to purchae a Euro.

Free forex training can be really tough when you see a price quote of say 100.50 on the Usd/Jpy pair for example . Using the above method , you take the Jpy base currency and look at the 100.50 price quote and this is the amount of Jpy it takes to purchase one US dollar. Pretty easy huh ? In the future you shouldn’t have difficulty understanding a pair and its price quote the next time you look at a chart screen or a quote window .

Now that we know how to read the price quotes , what are the main and cross pairs ? You’ll find the main pairs happen to be the strongest world economies paired versus the US dollar. A few of these pairs are Eur/Usd, Gbp/Usd, Aud/Usd, Usd/Cad, Usd/Jpy, and Nzd/Usd . The US dollar is not involved in a cross pair such as Eur/Jpy, Gbp/Jpy or Eur/Gbp to name a few of the more popular ones .

Hopefully this article will be of help to you if you have been intimidated by the free forex training landscape previously. You may need a bit of time to get used to this with all of the different currency pairs, time zones, and economies . But once you start to wrap your mind around how all of the pieces fit together it really is not too hard – and to many, this is a whole lot of fun!

David F Dacosta – Is a private trader using technical analysis to do free forex training & futures trading. David makes specific trade recommendations for a small select group of traders. He uses drummond geometry to make his forecasts. Click Here for training materials and a free forex trading forecast.