Lee M. from Taipei, Taiwan: I noticed that in forex, the currencies are quoted in pairs. How do I read these quotes and do you have a recommended broker?
Hi Lee and CompariZone readers, yes currencies are always quoted in pairs because you will be buying one currency and on the other hand, selling the other one for every transaction. Let’s set an example to make it clearer. For the foreign exchange rate of the Euro versus the US Dollar, the forex quote is EUR/USD. The currency on the left side is called the base currency, while the one on the right is called the counter or quote currency.
If you plan to buy then this exchange rate is the amount that you need to pay in units of the quote currency in order to purchase a unit of the base currency. In our example, this means that value is 1.24266 US Dollars for each 1 Euro that you buy.
As for selling, the exchange rate is the amount that you will get in units of the quote currency after selling a unit of the base currency. In our example, this means that for when you sell 1 Euro, you will receive 1.24236 US Dollars.
Remember that the base currency will always be the deciding factor regardless if you’re going to buy or sell. So if you’re going to say that you will trade the EUR/USD pair then you’re stating that you will buy the base currency and sell the quote currency at the same time. Only buy the pair if you predict that the base currency’s value will go up and sell the pair if you see that it will go down.
Now with regards to your question about the best brokers that we recommend, we highly suggest that you try AvaTrade because they are one of the most reliable forex brokers today. You may click here to access their website.