What Is the Forex Market?
Trading in currency pairs using the rates determined by the foreign exchange market is known as currency trading or forex trading. Traders buy and sell currencies at the determined currency exchange rate. When a trader sees any profitable opportunities, forex transactions are executed. Sometimes currency exchange is also mandatory.
What Is a Pair in Forex?
Forex trading requires currency pairs https://chain-reaction.network/ for trading. A pair indicates how many units of quote currency can be bought and sold against one unit of the base currency. A base currency is a currency that is listed first in a pair and a quote currency is listed second in a pair.
Traders cannot trade using only one currency, two currencies are important for trading in the foreign exchange market. The currency pairs are also classified into three different categories that are:
Minor pairs are also known as cross currency pairs and these pairs involve currencies of strong economies. They are less liquid pairs of the foreign exchange market.
The currency pairs in this category include the US dollar against other currencies of strong economies across the world. These are highly liquid pairs of the foreign exchange market.