for fundamental analysis of the rates for a particular currency against the other currencies of the world.
Sample Foreign Currency Trading Chart
Sometimes using a visual can help make an explanation clearer; note the sample chart below:
BSD Bahamas 1.00001.00000.73211.3659
This example helps to show the workings of the chart and the relationship between the various currencies. For instance, looking at the row for the Canadian dollar, the foreign currency trading chart shows that the US dollar is worth about 1.37 Canadian dollars, one CAD is worth about .73 USD, and just for assurance 1 CAD is equal to 1 CAD. (That seemed like an investment basic, but aren't you glad it worked out right?)
Looking for Arbitrage in Foreign Currency Trading
Arbitrage is the investment strategy of trading multiple currencies with the intention of profiting from any differences in the exchange rates. For example, we will trade USD, CAD and ARP. We will sell 5 USD and in return get 6.8295 CAD. After this we will sell our 6.8295 and get 14.725 Argentinean pesos. Finally when we sell our pesos and buy US dollars we get 5.00 again. While this example did not yield an arbitrage for us, it is easy to see how it works. If your investment timing is right and you catch volatility between the various pairs, arbitrage has the potential to be very profitable
Foreign currency trading can have its confusing moments, tangled up like a bowl of spaghetti. Once you learn Forex trading, concepts like foreign currency trading charts crystal clear!
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