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In Forex every trader enters into transactions using currencies, futures and so on. Any currency pair, any kind of metal, the company's shares and that everything that can be traded on the market is called a trading tool. The most common Forex trading instruments are currency pairs. It is impossible to buy or sell one currency, because it must have something to give. Of course, that for one monetary unit, we can offer a certain amount of another currency. That is why instruments on the market are as follows: EUR/USD, we are buying EUR / USD.
Somewhat simpler case with other trading instruments, which are not currencies of the countries. For example, if we talk about gold, equities, they are just abbreviated names. Gold often affects GOLD, and the name of the stock is taken from the reduction of the company. Such instruments are not in pairs, as their cost is estimated in US dollars (USD).
Currency pairs can be very diverse, but each pair is the two currencies in the market is provided only in one form. For example, there is the Forex pair EUR/USD, but no USD/EUR. It is not necessary to think that all the pairs containing the U.S. dollar, be sure to contain it in second place. For example, there are tools such as USD/JPY. In this case, we might sell or buy the US dollar for the Japanese yen.
Trading tools in Forex differ in a number of settings. For example, the differences may be the volatility, the spreads, the characteristic behavior of the instrument, liquidity and so on. Every speculator picks to trade certain pairs, futures, whose characteristics are best suited for the trader and his system. It is impossible to trade, say gold, and then replace it in their work for EUR/USD, not feeling the difference in the results.
The selection tool is implemented in two ways:
The trader chooses a tool under the already ready-made trading system
• A trading system is created specifically for one or several trading instruments.
In the first case, the person has some idea how to create an effective system. After creation is selected, for example, the currency pair that best meets the needs of the strategy. In the second case is a tool, it has a feature that it is possible to use for their own purposes, and then create a system. In this case, it is likely that the strategy will not generate profits when used on another tool.
Every trader chooses the material to work with. A if you select the same currency pairs will depend on the choice of the method that you want to work in the market. There is no best or worst pair to trade, otherwise Forex would be a lot of unclaimed instruments. Each speculator thinks differently about the prospect of using a particular material.
|Category: Forex | Added by: (06.11.2017)