In that consists Forex Major Currencies pair Liquidity

Although the forex or FX market is the largest trading market in the world, its existence or functioning pair retail or individual investors are largely unknown compared with fixed-income markets and variable. This is in large part due to a general lack of awareness of FX in the investor community, along with a lack of understanding of how and why the movement of currencies may result in one best investments.. Adding to the mystique of this market is the lack of a physical central exchange likes the NYSE or CME. It is this very lack of structure that allows the Forex trade 24 hours a day, beginning the trading day in New Zealand and continuing through the time zones and a half five days a week worldwide.    Traditionally, access to the FX market was limited to the banking community where traded large blocks of currencies for commercial, hedging, or speculative purposes. Then with the arrival of Brokers have opened the doors of Forex trading to institutions such as investment funds and money managers, as well as the merchant or retailer, or private investor. This sector of the market has grown exponentially in recent years.   What is Forex? For active traders and investors, foreign exchange should not be different with other investment products like stocks, commodities or bonds. Due to globalization in the economic world and consolidation of whole economic regions (ie, as the European Union), including currencies in a currency or investment portfolio helps to diversify assets and can help reduces the risk substantially.   Like other investment alternatives, foreign exchange offers traders and investors a market where you can sell and / or buy as an investment product were. Here traded currency pairs. The traded currency pair may be the Euro versus the U.S. dollar, the U.S. dollar versus the Japanese yen, the British pound against the U.S. dollar, the euro against the British pound, or a series of combinations of these or other currencies.     The different combinations of coins represent nothing more than the value of a currency against the value of another. This relationship is represented by a single price. In currencies, the price of a currency pair represents market expectations (at that time) the value of that currency measured in terms of the other currency, given the current and projected economic and political situation in the two economies involved in the pair currency.     If, for example, inflation and interest rates are low and the economy stable, and if the production of a country grows apace, or if your policy is stable and expectations are positive, then one can expects (in general ) the currency of that country will stand firm against another currency of another country less favorable.    In the same way that the stock market if the domestic and global economy is strong, and if inflation is not rampant, and if the competition of a company not being took away market share or eating part of the margins, and if the demand for the goods or services keeps rising, with companies maintain internal policies such that worker are unhappy and are productive, expectations for the shares of the company will be encouraging, then you can expect that the shares of the company continues to rise.     Similarly, as in the stock market, in forex there are other factors that determine the short term value of an asset such as technical analysis, supply and demand in the short term, seasonal capital flow, the current price of the financial instrument, etc. This is the dynamic universal move a currency value up or down. When analyzing the dynamics of prices and the implementation of sound policy money management and discipline, the investor can ensure greater success in forex trading.   Couple most liquid currency Currencies, like stocks and bonds, have pairs of currencies are very liquid and others are not. The liquidity of the currency pairs can be characterized as those involving the most stable economies both economically and politically. Between these are the countries that form the G7 - the United States, Japan, Britain, France, Germany, Italy and Canada.   The most liquid currencies include U.S. Dollar (USD), the Japanese Yen, the British Pound, the Euro and the Canadian Dollar. It is estimated that the activities in these currencies account for over 80% of the daily volume of foreign exchange transactions.     Symbols of currency pairs The coins, like actions, have their own symbols that distinguish one from another. Since currencies are quoted in terms of the value of one against the value of another, a currency pair includes the "name" for both currencies, separated by a slash "/". The "name" is a three-letter acronym. The first two letters are reserved usually to identify the country. The last letter is usually the first letter of the name of the currency of that country.   USD = United States Dollar  GBP = Great Britain Pound, British Pound  JPY = Japan, Yen Japanese Yen CAD = Canada Dollar, Canadian Dollar  CHF = Confederatio Helvetica (Latin for Swiss Confederation) Franc  NZD = New Zealand, New Zealand Dollar  AUD = Australia Dollar, Australian Dollar  NOK = Norway Krona, Norwegian Krone = Sweden Krona SEK, Swedish Krona   The Euro is not a country, is credited simply stands for EUR   Combining one currency to another e.g., EUR, in USD, we have the EUR / USD.    Base currency and counter currency  One currency in a currency pair is always more dominant than the other, and calls this currency as the base currency. The base currency is identified as the first currency in a currency pair. It is also the currency that remains constant to determine the price of the currency pair.   The Euro is the dominant base currency against all global currencies. As a result, currency pairs against the EUR will be identified as EUR / USD, EUR / GBP, EUR / CHF, EUR / JPY, EUR / CAD, etc, all pairs have the EUR acronym as the first in the sequence. The British Pound is next in the hierarchy of the domain of the coins. The major currency pairs versus the GBP can be identified as GBP / USD, GBP / CHF, GBP / JPY, GBP / CAD, etc. Except for EUR / GBP, GBP usually is the first currency in a currency pair.   The USD is the next dominant base currency forex. The USD / CAD, USD / JPY, USD / CHF would be the normal major currency pairs. Since the EUR and the GBP are more dominant in terms of base currencies, the dollar is quoted as EUR / USD and GBP / USD.    Knowing the base currency is important because it determines the value of another currency traded in the forex market. The secondary currency or counter currency is the second currency in a currency pair. The value of currencies The base currency is always equal to the monetary unit of the currency involved (ie 1 Euro, 1 British, and 1 Euro). When an investor buys 100,000 EUR / USD, is said to be buying the Euro or the base currency and sell or pay USD or the counter currency. The amount of the base currency you buy is equal to 100,000 Euros. Note that this is true regardless of the exchange rate in affect at that time. The base remains a constant currency amount.   On the other hand, the equivalent of the currency against which the investor is selling (or paying), fluctuate with the exchange rate of the currency pair. That is equal to: (Amount of Base Currency x Market Foreign Exchange Rates)   Since the Counter Currency is the currency pair that fluctuates higher or lower, and determines the strength or weakness of both currencies in a currency pair. When a currency goes up, the other down.