FX Trading Class 101 Part 1

*This is to be the first installment following the post where I promised to flesh out the material this blog focuses on, currency trading*

The first, and most important aspect of currency trading is understanding the "currency cross." Which currency pair are we looking at or trading? When identifying a cross, it is displayed as the following:

"currency A" / "Currency B"

So if I were to see

"EUR/JPY"

and then the price quote: "115.236" next to it, what I am reading is that 1 Euro buys 115.236 Yen. Another way to conceptualize a cross is backwards, or, to buy 1 Euro requires 115.236 Yen.

After grasping what a pair and its price quote represents, we can move onto our options when trading, and there are only two.

Buying (other terms: "going long," "covering," etc.)

and

Selling (other term: "shorting")

For the purposes of this blog, I will refer to buying as "buying" and selling as "shorting."

I'm really beat, and I'll be completing this series tomorrow morning along with my market sentiments.

Thanks for reading!