When you trade with currency pairs you are buying one and selling the other. Let’s look at this simple example to illustrate how it works: EUR / USD is a commonly operated currency pair. The EUR is the symbol of the Euro and the USD is the symbol of the US dollar. In the previous currency pair, the EUR is considered as the base currency and the USD is the quote currency.

The relationship is seen as an individual unit, although it refers to two individual currencies

Let’s clarify more this example of basic currency trading by adding some figures. If we assume that the EUR / USD is trading at 1.25346, which means that each € 1 = $ 1.25. In other words, the Euro is stronger than the dollar or, conversely, it would need more dollars to buy Euros.

Major Currency Pair

When trading with currency pairs, you will find six pairs considered major in your daily operations. These include USD. In the Forex school you will come to know about these matters now.

Pair of Minor Currency

On the contrary, the smaller pairs are those that are operated less than the older ones. They are less liquid than larger pairs and offer wider spreads. As a general rule, the minor pairs are the pairs that do not belong to the major category listed above.

Exotic Currency Pair

Typically, unusual currency pairs comprise of the currency of a country in the emerging market. The reason why they are named exotic is not related to the site of the nation, but to the extra challenges involved in transacting these currency pairs. They are usually not liquid, with wider spreads and fewer markets.

Whether you operate too often or use excessively high volumes, it is never convenient for you to overwork. This is a common problem with beginners, who get too excited and end up risking unnecessarily. For this reason, you should always create a trading plan and follow it to the letter.

Among the most notable Forex tips and tricks is the existence of the trading plan. This kind of plan can avoid a lot of inconveniences related to human nature and lack of direction in the market.

Analyze your operations history

For this step, it is necessary that you keep a record of all the operations you perform in the forex market. In the history of operations you can find the most common mistakes you make along with your areas of success.

It can be said that this is one of the most useful Forex tips for beginners, since it allows you to improve your trading skills and increase your profits.

Be careful with greed

Along with fear, greed can be the bane of many Forex traders. This emotion causes you to follow the price blindly or leave losing trades open for a long time to wait for the market to change direction miraculously.