Each of us is at least once a lifetime, but listen to the mysterious word that some, for example, the Dow Jones index rises or falls with some points. Despite the fact that everything is quite simple, it seems to be something that really can’t be understood to an approved that does not know about stock trading on expenses even anything. Similar stories in Forex currency quotes, the interest value is quite clear, but the condition with stuff is the same. Consider a reading quote, from which it would be clear how to determine changes in exchange rate and expression in paragraph.
Currency pair quotes on Forex indicate a ratio between currencies, namely, How many unit currencies are contained in another unit. For example, when we say that today’s dollar is 65.74, we mean that by selling one dollar, we get 65 rubles and 74 pennies. Similarly, you have to give the same amount to buy one dollar. That is, Forex quotes show a simple ratio. It is a little harder to see information when the currency is closed in value, such as EUR/USD, worth 1.1504- 10000 shares are already carried out here.
What to check on Forex
Learn the graph, you can consider almost all the scales. Many follow the exchange rate of ruble against the dollar, others catch a glimpse of the charts shown in the air RBC or other channels. This can be both an annual cycle of movement and last month. And here the question arises – and how far it is possible to increase this scale. The answer is simple: The minimum amount of price changes on any currency is a sign. This is the smallest measurement unit where trading is carried out globally. As you know, all movements in the Forex market, and in general everywhere, occur under the influence of trading results at a certain time. There are two buyers and sellers. Some offer assets, others want to buy them. If there’s someone who wants to buy a lot of dollars at once, while selling ruble, then the following will happen:
- The total number of offers, which is now available at current prices will be sold to this buyer.
- In this case the same buyer wants to buy more, the next sign for the transaction will be the price of one mark higher, because everything that is bought out and the offer is no longer. This change is due to the fact that supply has been run out, and the demand is still there.
- The previous Item will be repeated until the entire application of the buyer is satisfied. It is logical to assume that The larger it is, the stronger the price change will be.
This is what the tick chart looks like-changing prices according to lowest unit:
And now, imagine that Forex and buyers, and millions of sellers, and each had its own interests. It by concept Liquidity -The greater the volume on each side, the easier it is to put your bid for purchase or sale so that it does not affect the market. If you take an action that is not running, you can see how right from the market no one is selling and not buying, frozen price, and if moving, then a huge movement continues. Currency pairs EUR/USD is the most liquid trading instrument, the movement caused by a large amount. Even a currency pair can be driven by many cravings. For example, to weaken the Franc with about 10%, Swiss National Bank sells more than 5 billion Franc in Forex, which instantly collapsed the rate. But such event is. Usually such a serious movement takes weeks, if not months. Considering that the currency is rarely moving straight, it turns out quite a big movement, it is only intended in both directions with some advantages of one. For the day you can see growth, then push and further growth, and in the end with the prices the price will be slightly higher than that in Asia’s opening. Just because of continuous volatility, many people prefer to trade on Forex, rather than other sectors of exchange.
What is a Forex item
And tick, the items are the structure unit of the Forex quotes, this is the next price change Order. In most currency pairs, quotes are represented by four digits after commas, paragraphs called last figure changes- Ten-thousandth shares. There are also currency pairs where only two decimal places, such as dollar pairs against Yen, USD/JPYThat looks like this: 115.75 in this case One hundred stocksOf the ten-thousandth, act as an item.
There are Forex brokers that do not have four decimal scars, but five. That is, they also reflect the tenth point. That’s what they call them. Four-digit or five-digit broker. In other instances, the new third digit after the comma is added. This tenth point is no more than one sign we checked before. In addition, this price representation form gives traders several advantages, for example, spreads less than one point. In general, the fifth sign-up application after commas are evaluated by market participants as a positive phenomenon, as used for this type is not so difficult. From time to time, its own eyes start allocating the correct number, though, at first glance, it is difficult. Everything comes with experience.
How to Count Forex items
Now let’s move to the most important thing- Price Changes. The Item is considered very easy – this is a common rejection of the larger quote much smaller. For example, if the Euro versus dollar increases from 1.1500 to 1.1650, it will increase to 150 points. Sometimes there is confusion among Forex traders because some people do not know the definition of the item and call them the last sign after the commas on the five-digit broker. This is wrong, the item is ten thousandth from stocks and in any other way, except with currencies such as euros or ruble, but it is not so common.
Read more types and types of Forex orders