|Commonly traded currencies in the FX market|
|USD||United States Dollar|
|JPY||Japanese Yen (USD/JPY)|
|GBP||British Pound or Sterling (GBP/USD, or STG/USD)|
|CHF||Swiss Franc (USD/CHF)|
|CAD||Canadian Dollar (USD/CAD)|
|AUD||Australian Dollar (AUD/USD)|
|NZD||New Zealand Dollar (NZD/USD)|
When trading forex prices, you would buy a currency pair if you believed that the base currency will strengthen against the counter currency. Alternatively, you would sell a currency pair if you believed that the base currency will weaken in value against the counter currency.
Forex trading allows you to speculate on price movements in the global currency market. Currency values rise and fall in relation to each other and in response to national and international economic, financial and political events. There is no difference in profit or loss potential if a currency rises or falls in relation to its trading partners so you can as readily sell a currency as you can buy it.
The first currency in any pair, for example EUR/USD or USD/CHF is the base currency. Trades and positions are calculated in that currency. For EUR/USD trades are made in euros but for USD/CHF, trades are conducted in US dollars.
Forex is a leveraged product enabling you to trade by paying a small fraction of the equity that would be needed to fund a trade. This means that you can potentially magnify your returns on an investment. Remember though that higher leverage can result in losses that exceed your initial deposit.