New investors (as well as seasoned investors) can easily become overwhelmed when first encountering a forex trading system. Most forex systems utilize user-friendly platforms, with easy-to-comprehend charts, graphs, and explanations, as well as simple-to-use trading mechanisms for buying and/or selling currencies. One of the basics of a forex trading system is the “dealing rates” page or window. Once an investor understands the rate window, he’s on his way to successfully buying and selling currencies.
The rate window is simply a snapshot of a given currency pair at any given time. It usually includes the following variables:
· Currency pair – Currencies are always noted in pairs (i.e. USD/EUR), since currencies are being traded from one currency to the next. The first number, the quote currency, tells an investor how much a certain country’s currency is worth. The second number, or the base currency, always equals one. Currencies are noted to either 1/100th of a unit or to even 1/1000th of a unit (i.e. 1.65886). A change from 1.65886 to 1.65887 is a change of one unit (or one pip).
· Sell price – The price at which the market would bid for the currency.
· Buy price – The price at which the investor can by the currency.
· Low/high numbers – The low number on the window (i.e. low: 1.62566) represents the current day’s lowest sell price for the given currency. The high number refers to the current day’s highest buy price for the particular currency.
· Current spread – This number refers to the difference between the buy and sell price at the current time for a specific currency. It’s expressed as a unit, or pip difference.
· Trade size – The amount of currency lots (standardized transaction size) to be traded.
· Time – The last time the rates were updated. If an investor leaves his rate window open a while, he should refresh the page before conducting a trade on a forex trading system.
Additional features
Some forex trading systems list up to 10 to 12 currency pairs, while others provide an additional list of a dozen or so currency pairs. With so many currency pairs to choose from, an investor is bound to find the pair that interests him.