Frequently Asked Questions

WHAT IS THE DEFINITION OF A PIP?

WHAT IS THE DIFFERENCE BETWEEN BASE CURRENCY & QUOTED CURRENCY?

If we consider a currency pair EUR/USD, the EUR is base currency and USD is quoted currency. The

base currency is the currency which is sold to purchase the quoted currency, in order to get profited.

WHICH CURRENCIES ARE TRADED IN THE FOREX MARKET?

t depends on the retailers that which currency do they want to use but some of the very common

currency pairs used while trading are:

EUR/USD (euro/dollar)

USD/JPY (dollar/Japanese yen)

GBP/USD (British pound/dollar)

USD/CHF (dollar/Swiss franc)

& most common commodity pairs are:

AUD/USD (Australian dollar/dollar)

USD/CAD (dollar/Canadian dollar)

NZD/USD (New Zealand dollar/dollar)

The Currency Pairs described above can be used in different combinations.

For example, EUR can be used with JPY and vice versa.

WHAT IS ARBITRAGE?

Arbitrage is a term, used in a process where a security or commodity is bought from one market and

then is sold to another market at the same time by earning profit. The concept is that the security is

sold in higher price than that of the buying price. Arbitrage is a kind of benefit earned without

concerning about the risk factor, that’s why used the most by traders/investors.

WHAT IS FOREX SPREAD?

In every possible way of forex trading, everything is performed via mediators who charge a specific

amount for their services. This charging fee or difference between the bidding prices is known as “forex

spread”.

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