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Trading Commodities, Commodity Options and Currencies (Collection) by Carley Garner, Paul Brittain

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5. FOREX Trading Quotes and Calculations

Perhaps the biggest challenge faced by FOREX traders, aside from accurate price speculation, of course, is getting comfortable with the way FX pairs are quoted and calculated. Similar to the fractions that keep the math involved in commodity trading complex, FOREX traders must be at ease working in decimals. The goal of this chapter is to simplify the concept in an attempt to shorten the learning curve.

How FX Pairs Are Quoted

As we have discussed, all tradable markets have a bid and ask spread. This is true of baseball cards, houses, and even goods traded in pawn shops, but in the financial markets it is much more obvious. This is particularly true in FX because the bid and ask are blatantly highlighted. ...

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