Understanding Currency Pairs

Understanding the forex market, you have to understand that currencies come in pairs. Forex market refers to trading currencies in pairs to make things easier.

Currency Pairs

Unlike the stock market that has nearly one million businesses to stay updated on (okay, okay 1 million figure might be stretching it, but come on, it does feel like it), the forex market is much easier to deal with. Here things can be easily controlled because the currency pairs are grouped in different categories. They are generally categorized into two main groups, majors and exotics. Let us take a look at them in a little more detail.

Majors

The majors are the most popular currency pairs that are available for trading. They are the most popular and hence, in turn, they hold the most liquidity and are much cheaper to trade because of spread cost. Now if you do not know what the term Spread means then don’t worry, we explained it in our online course (Forex Blueprint) 

The examples of major pairs include-

Exotic

Under exotic currency pairs, one major currency is paired with the currency of an emerging economy like Mexico. The examples of the exotic category are as follows-