X-Future Bot
Because forex involves the exchange of two currencies, all FX trading is done in pairs. The base currency is the first currency in a pair, whereas the quote currency or counter currency is the second. EURUSD, for example, is a currency pair that allows you to trade the Euro against the US dollar. The base currency is EUR, which represents for Euro, and the quote currency is USD, which stands for United States Dollar.
Currency pairs are divided into three groups based on their characteristics in the market.
Currency pairs are divided into three groups based on their characteristics in the market.
| Majors | Currency Pair | Nickname |
|---|---|---|
| EUR/USD | Euro against the US dollar | Euro |
| USD/JPY | US Dollar against the Japanese yen | Gopher |
| GBP/USD | British Pound against the US dollar | Cable or Sterlingd |
| USD/CHF | US Dollar against the Swiss franc | Swissie |
| USD/CAD | US Dollar against the Canadian dollar | Loonie |
| AUD/USD | Australian dollar against the US dollar | Aussie |
| NZD/USD | New Zealand dollar against the US dollar | Kiwi |
Currency pairs that do not involve the US dollar are called Crosses or minor currency pairs. They are riskier to trade than majors.
| Minors | Currency Pair |
|---|---|
| EUR/GBP | Euro against British Pound |
| EUR/JPY | Euro against Japanese Yen |
| EUR/CHF | Euro against Swiss Franc |
| EUR/CAD | Euro against Canadian Dollar |
| AUD/JPY | Australian Dollar against Japanese Yen |
| AUD/NZD | Australian Dollar against New Zealand Dollar |
| GBP/JPY | British Pound against Japanese Yen |
| NZD/JPY | New Zealand Dollar against Japanese Yen |
| NZD/CHF | New Zealand Dollar against Swiss Franc |
| GBP/AUD | British Pound against Australian Dollar |
Exotics are the group of currency pairs that involve at least one currency from a small country or emerging economy. Exotics associated with higher risk as they are known as susceptible pairs to sudden economic and political changes.
| Exotics | Currency Pair |
|---|---|
| EUR/TRY | Euro against Turkish Lira |
| USD/TRY | US Dollar against Turkish Lira |
| USD/INR | US dollar against the Indian rupee |
| USD/NOK | US Dollar against Norwegian Krone |
| USD/DKK | US Dollar against Danish Krone |
| USD/ZAR | US Dollar against South African Rand |
| USD/THB | US Dollar against Thailand Baht |
| USD/SGD | US Dollar against Singapore Dollar |
| USD/SEK | US Dollar against Swedish Krona |
| USD/MXN | US Dollar against Mexican Peso |
CFD is short for Contract for Difference and refers to the type of trading instruments obtaining their value from an underlying asset. CFDs are popular speculative tools that allow traders to participate in asset price movements without fully owning the underlying asset.
CFDs are categorized into five groups depending on their underlying asset as follows:
These exceptional features of CFDs make them very popular for trading:
With CFDs trading, you can participate in many different markets like equities, commodities, spot metals, cryptocurrencies, and forex on one trading platform without having to own physical assets.
CFDs can provide very flexible trading opportunities as they can be traded on both rising and falling markets. If you expect the value of an underlying asset to grow, you can buy a certain number of CFD on that asset or go long. Vice versa, if you think the asset price will crash, you can sell its CFD or go short. So, CFDs give you an opportunity to profits in both directions.
CFDs trading is possible on a fraction of the underlying asset, which means you can enter the market with smaller amounts of money. So, CFD trading is cheaper than trading the underlying asset while it provides you with the same opportunities to profit.
You can use leverage when trading CFDs. Leverage increases exposure on a trade for a certain amount of capital that can magnify profits. However, the leverage also increases the trader's risk.
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