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Forex and cryptocurrency Basics
(Know more about Forex and Cryptocurrency investment)

What is forex?

The term Forex is a shortened form of foreign exchange, which is also occasionally abbreviated as FX. It refers to the worldwide, decentralized market for trading currencies. In this market, traders, investors, banks, and exchanges engage in buying, selling, and speculating on various currencies. As a result of this activity, the exchange rate for different foreign currencies is determined.

What are currency pairs?

Forex involves predicting the changes in the values of two currencies from different countries. These currencies are known as "currency pairs," made up of the base currency and the quote currency. The most commonly traded currency pair is the Euro and the US Dollar, represented as EUR/USD.

What’s a quote currency?

The second currency in a currency pair is called the "quote currency," also known as the "counter currency." In the given example, the USD is the quote currency.

How does forex trading work?

To trade forex is to buy and sell currencies – with the aim of making a profit. Forex trading will always involve two currencies at a time, the base currency and the quote currency. The difference in price is where you’ll make your profit or loss.

What’s a bid price?

The "bid price" is the price that a trader is willing to pay to buy a currency pair. It is constantly changing due to fluctuations in the market.

What is a position?

A "position" refers to a trade that is currently ongoing. In trading, there are two types of positions: "long" and "short."

  • Long position: to take a "long position" means that a trader has purchased a currency with the anticipation that its value will increase. When the currency is eventually sold, the long position is deemed closed.
  • Short position: to take a "short position" means that a trader has sold a currency with the anticipation that its value will decrease. When the currency is eventually bought back, the short position is considered closed.
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