Because you are not buying or purchasing anything physical, this type of trading can be very confusing.
Take an example, of buying some currency as purchasing a share in some specific country, just like buying stocks from a company. The cost of the currency can be said to be a direct reflection of the opinion of the market concerning the current and the future of the specific country’s Economy.
When one buys for example the Swiss Franc, you have simply bought a “share” in the Swiss Economy. In other words the buyer who is you is betting that, the Swiss Economy, is doing fabulously well and will continue to do well, or you hope that the Swiss economy will do well in the near future. So, once the buyer sells the “share” back into the market, hopefully, he or she will sell them at a price higher than the amount he or she bought them, thereby making a profit.
Generally speaking, an exchange rate of one specific currency pair compared to other currencies in the market, can be said to be a reflection of a country’ condition, economic wise, as compared to the economies of other countries.
There are many currencies, but, in Forex there are only eight major currencies which are traded mostly, (see the picture), the currencies are always represented by symbols having three letters, in which the the initial two letters do represent the country, while the third symbol identifies that specific currency’s Name used in the specific country.
Take an example of the symbol, CAD, the CA stands for the country Canada, and the D stands For the Dollar. Easy enough, Correct?
The currencies I have included in the image in this articles are commonly referred to a the majors, as they are the widely used by most traders worldwide.
It is prudent to state clearly here that, the words like”Buck, Fiber, Cable, Swissy, loonie, Aussie, Kiwi” are the nick names of the major currencies.
So just in case you wanted to tell your buddy that ” I have got stuff to do.”
You could simply say that, “Yo, I have got Bounce! I have to make them Benjis Man.”
Or if one wanted to say that, ” I have got money, why don’t we go shopping in the afternoon.”
you could just say, “Yo, I got mad Buck! Why don’t we go shopping later.”
By the way, has it ever come to your realization that, in Peru, the United States Dollar has been nicknamed Coco! which is said to be the name of Jorge’s pet (also known as George in Spanish), which is reference to the portrait of the Late US president George Washington found on the $1 note?