So, you want to be a forex trader. But what can you trade in the FX markets?
But it’s not as simple as that.
There are 180 currencies in the world so how are you supposed to know what they’re all called and which ones to trade?
Well, while you can trade almost any currency in theory, you’ll find that there are some currencies that are a tad more popular than the others. More than 85% of all global forex market transactions happen with only 7 currencies.
But we will get to that.
For now, pull up a chair and get cozy, because you’re about to learn all there is to know about currency names.
Currency symbols always include three letters.
The first two letters stand for the name of the country and the third letter symbolises the name of that country’s currency, which is usually the first letter of the currency’s name.
Let’s look at the USD for instance…US stands for United States while D stands for dollar.Simple, right?
Fun Fact: The US Dollar is the most traded currency, being part of almost 90% of global trades.
OK, remember how we said we’d get down and dirty with the details of the most popular currencies in forex trading? It’s time.
The most popular and widely traded currencies in forex are referred to as ‘major currency pairs’. These represent some of the world’s largest economies.
Some examples of the majors include: USD, EUR, GBP, JPY, CAD, CHF, NZD, AUD.
Do you know the name of all of the currencies above? Don’t worry if you don’t!
Fun fact: “Buck” isn’t the only nickname for USD. There’s also: benjis, paper, moolah, cheese, loot, cheddar, scrilla, dead presidents, and cash money. In Peru, the U.S. dollar is called a Coco, after George Washington whose portrait is on the dollar note.
When you trade in the forex market, the currencies are traded in pairs. Learn more about currency pairs in the next lesson.