Start Your Forex Career by Trading the EUR/USD

You will find that the most highly traded currency pair in the world is the EUR/USD. If you are just starting your Forex career, then you are well-advised to trade this pair first until you are more experienced. You will benefit from trading the EUR/USD because it is highly liquid and is one of the least expensive pairs to trade. You need to realize that 80% of all Forex transactions are placed with the EUR/USD.

In Forex, the Euro is termed the base currency whilst the USD is the counter currency. This means that when you are quoted a price for the EURUSD, the value represents the number of dollars you will receive for each of your Euros. For example, if EUR/USD is posting 1.3010, then you can buy 1.3010 US dollars with each of your Euros.

You can profit by trading the EUR/USD if you can correctly predict the future direction that the pair will take. For instance, if you believe that the dollar will appreciate against the Euro, then you should sell the EURUSD. For example, consider that you decide to sell the EUR/USD when its price is 1.3550. If this currency does, in fact, drop to 1.3400, then you will realize a profit of 150 pips.

A pip (percentage in point) represents the smallest price unit in Forex trading. Prices of currency pairs, except the USD/YEN, are always displayed to the fourth decimal point, e.g. 1.3005.

Forex brokers charge a spread for each currency pair they allow you to trade. In Forex trading, the difference, between the price that you can buy a currency pair and the one at which you can sell it, is termed the spread. You must always strive to trade currency pairs with the lowest spreads as possible in order to keep your costs down.

This is one of the EUR/USD strengths because it offers very low spreads even down to as low as 1 pip. You must realize that should you select to trade a currency pair that exhibits a higher spread, then you will find it harder to achieve short-term profits. You will also discover that traders prefer to utilize the EUR/USD as their primary tool to speculate on the overall value of the dollar.

If you can believe that there may be a significant change in the value of the EUR/USD, then you can trade it knowing that you can benefit from two of its major attributes which are a low spread and high market liquidity. The latter quality is important because you can trade a currency pair without almost any restrictions if its liquidity is high because there will always be another party willing to complete your transaction.

Some Forex traders trade the EUR/USD exclusively because of the advantages it possesses compared to other currency pairs. As such, you will need to devise a trading strategy to allow you to capture profits consistently by detecting good EUR/USD trading opportunities. That is why....I focus on this pair to trade most of the time and also of the lowest commission. Can be compared to the USD/JYP pair too esp for us trading in the day time when Japan is live.