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Futures are contracts to buy or sell a certain asset at a specified price on a future date (That’s why they’re called futures!). A currency future is a contract that details the price at which a currency could be bought or sold and sets a specific date for the exchange.Currency futures were created by the…

Because forex is so awesome, traders came up with a number of different ways to invest or speculate in currencies. Among the financial instruments, the most popular ones are retail forex, spot FX, currency futures, currency options, currency exchange-traded funds (or ETFs), forex CFDs, and forex spread betting. It’s important to point out that we are covering the different ways that individual (“retail”) traders can trade FX.…

The main functions of the forex market are: One important thing to note about the forex market is that while commercial and financial transactions are part of the trading volume, most currency trading is based on speculation. In other words, most of the trading volume comes from traders that buy and sell based on the short-term price movements of…

You’ve probably noticed how often we keep mentioning the U.S. dollar (USD).If the USD is one-half of every major currency pair, and the majors comprise 75% of all trades, then it’s a must to pay attention to the U.S. dollar. The USD is king! In fact, according to the International Monetary Fund (IMF), the U.S. dollar comprises…

The bulk of forex trading takes place on what’s called the “interbank market“. Unlike other financial markets like the New York Stock Exchange (NYSE) or London Stock Exchange (LSE), the forex market has neither a physical location nor a central exchange. The forex market is considered an over-the-counter (OTC) market due to the fact that the entire market…

Whew! That was a lot of information on currencies but you just raised your FX IQ points! 🧠 Let’s summarize what you’ve learned in a series of questions: What is a currency pair in forex?A currency pair is a pairing of currencies where the value of one is relative to the other. For example, GBP/USD is…

BRIICS is the acronym coined for the association of six major emerging national economies: Brazil, Russia, India, Indonesia, China, and South Africa. Originally the first four were grouped as “BRIC” (or “the BRICs”). BRICs was a term created by Goldman Sachs to name today’s new high-growth emerging economies. BRIICS is the term created by the OECD, when…

Scandinavia is a subregion in Northern Europe, with strong historical, cultural, and linguistic ties. The term “Scandinavia” in local usage covers the three kingdoms of Denmark, Norway, and Sweden. Together, their currencies are known as the “Scandies“. Back in the day, Denmark and Sweden established the Scandinavian Monetary Union to merge their currencies to a gold standard. Norway…

The G10 currencies are ten of the most heavily traded currencies in the world, which are also ten of the world’s most liquid currencies. Traders regularly buy and sell them in an open market with minimal impact on their own international exchange rates. COUNTRY CURRENCY NAME CURRENCY CODE United States dollar USD European Union euro…

No, exotic pairs are not exotic belly dancers who happen to be twins. An exotic currency is a currency from countries with developing or emerging markets. Exotic currency pairs are made up of one major currency paired with the currency of an emerging economy, such as Brazil, Mexico, Chile, Turkey, or Hungary. Basically, an exotic currency pair includes one major…