Forex Charts Article:

Forex Training: How To Read A Forex Quote
By Gregory DeVictor
is an abbreviated name for "foreign exchange." The market is a non-stop cash market where the currencies of nations are bought and sold, typically via brokers. For example, you buy Euros, paying with U.S. Dollars, or you sell Euros for Japanese Yen.

The value of your investment increases or decreases because of changes in the currency exchange rate or rate. These changes often result from economic and political factors, such as the price of oil or political unrest. To better understand how the exchange rate can affect the value of your investment, this article shows you how to read a quote.

Forex quotes are always expressed in pairs. In the following example, your "pair" of currencies are the U.S. Dollar (USD) and the Euro (EUR). The quote, USD/EUR = 265.50, means that one U.S. dollar is equal to 265.50 Euros. The currency to the left of the / (USD in this case) is referred to as base currency and its value is always 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one USD can buy 265.50

EUR, since it is the stronger of the two currencies.

Because the U.S. dollar is regarded as the central currency of the market, it is always treated as the base currency in any quote where it is one of the pairs. Incidentally, the U.S. Dollar is involved in nearly 90% of all transactions.

In this example, your "pair" of currencies are the Japanese Yen (JPY) and the Euro (EUR). The quote, JPY/EUR= 175.10, means that one Japanese Yen is equal to 175.10 Euros. The currency to the left of the / (JPY in this case) is referred to as base currency and its value is 1. The currency to the right of the / (EUR in this case) is referred to as the counter currency. In this example, one JPY can buy 175.10 EUR, since it is the stronger of the two currencies.

The goal of any trading system is to profit from foreign currency movements. This requires adequate training in basic principles, such as performing a Technical Analysis, using charts and Stop/Loss tools, and keeping up-to-date with economic and political events. In a sense, training never ends.

Search for more information about Forex Charts