Understanding Forex Quotes in Forex Currency Trading

Forex currency trading deals with the currency markets otherwise called forex. Forex stands for foreign exchange or also called FX. This type of trading involves buying one currency whilst selling another.

In order to be successful in forex currency trading, one must understand the forex quotes, how they are presented, and how a trader makes a trade on the currency. In forex currency trading, currencies are presented in pairs against one another. The first currency listed is the base price and the value of the base price is one. Therefore, the currency tells a trader that one unit of the base currency is equal to the current market value of the other currency.

In forex currency trading, the base currency is often the US dollar. When the dollar is the base value, and the quote increases, this signifies the dollar is strengthening. This description is different when dealing with the British pound, the Australian dollar, and the Euro. In forex currency trading when trading these three currencies and the US dollar is not the base currency, when the quote increases the US dollar is actually weakening. In other words in forex currency trading, an increase in a quote signifies the base quote is strengthening and vice versa.

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