WHAT IS TRADED IN FOREX

 

 

Forex, short for foreign exchange, is the process of exchanging one currency for another. Forex trading involves buying and selling different currencies in the hopes of making a profit from the fluctuations in their exchange rates. But what exactly is traded in forex? In this article, we'll explore the different currencies that are traded in the forex market.

Major Currencies

The forex market is dominated by a few major currencies that are traded in high volumes. These currencies are known as the majors and include:

 US Dollar (USD)
 Euro (EUR)
 Japanese Yen (JPY)
 British Pound Sterling (GBP)
 Swiss Franc (CHF)
 Canadian Dollar (CAD)
 Australian Dollar (AUD)
 New Zealand Dollar (NZD)

These currencies are considered the most liquid and widely traded in the forex market. They are also the most stable and have the most established economies, making them less volatile than other currencies.

Minor Currencies

In addition to the majors, there are also minor currencies that are traded in the forex market. These currencies include:

 Swedish Krona (SEK)
 Norwegian Krone (NOK)
 Danish Krone (DKK)
 Singapore Dollar (SGD)
 Hong Kong Dollar (HKD)
 South Korean Won (KRW)

Minor currencies are less liquid and less widely traded than the majors. They are also generally more volatile, making them riskier to trade.

Exotic Currencies

Finally, there are exotic currencies that are traded in the forex market. These currencies are from emerging markets or countries with less established economies. Examples of exotic currencies include:

 Brazilian Real (BRL)
 South African Rand (ZAR)
 Turkish Lira (TRY)
 Mexican Peso (MXN)

Exotic currencies are the most volatile and carry the highest risk. They are also less liquid and less widely traded than the majors and minors.

In Conclusion

In forex trading, currencies are bought and sold in pairs, with the exchange rate between the two currencies determining the value of the trade. The currencies that are traded in the forex market include the majors, minors, and exotic currencies. The choice of currency to trade will depend on a trader's risk appetite, investment goals, and market conditions.