This article looks at the uses of an FX converter when you first start trading in the forex market.
When you enter the forex market, you do so to make a profit from buying and selling currencies. Currency pairs are provided in quotes on the forex spot market. Currencies are always traded in pairs, hence the quotes are displayed in a specific manner.
Although you are buying a currency which may not be your domestic currency, you will not receive the physical currency. This is at times very confusing for novices in this market. You should think of your trades as purchasing shares in a foreign country. Your trades are based on the speculation of that country’s economic health.
Quotes and FX Converter
A country’s currency value is based on its value to another currency. If you receive a quote which indicates GBP/AUD, it means that the British pound is the base currency and the Aussie dollar is the quote currency. This pair indicates the amount in Australian dollar you require if you wish to purchase a British pound.
If you are a novice in this financial market, you should consider obtaining a very useful tool called an FX converter. You can use this tool to help you do the necessary calculations of one currency to another. Most of the available converters offer you the option to convert a wide range of currencies, both the major currencies and other secondary currencies. You will find other forex information on the sites that offer you FX converters. This includes economic data and forex news releases.
When you first enter the market, you should plan which currency pairs you intend trading. It is advisable for novices to trade the major currencies. There is normally ample information available for these pairs which will allow you to undertake analysis and draw charts to improve your chances to make profitable trades.
There are novice traders who will opt not to trade the major currencies. This is particularly so for those who are not based in a country with a major currency. You can match a major currency with an alternate currency and still make regular profits. An example of this is if you are a trader who is based in South Africa and you decide that you want to trade the USD/ZAR. You will normally have more information available than a Singaporean trader who tries to trade the South African Rand. You will understand the mechanics of the SA Reserve Bank and the political climate within the country. Having this type of fundamental news at hand will make it easier to trade the currency pair and show a profit.
You need to develop a suitable forex strategy to enhance your trading. The strategy you choose should be suited to your personality and the time you have available for your trading career. It will not make sense for you to become a scalper if you cannot cope with the speed of the trading method and the stress that accompanies it. Your mental state is as important to your trading success as your technical knowledge of the market. If you are removed from your normal personality type, you will not be comfortable trading, and this will be apparent by the negative trade results you may display.