Excerpt from: Forex Training
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| September 10, 2008 | | Currency trading is always done in pairs | One of the most important and fundamental things to remember about currency trading is that it is always done in pairs. Pairs trading on the FX market is arranged such that one currency rises or falls with regard to another. While other currencies can influence the performance of a pair, it is important to remember that you should consider each pair separately.
Another feature of pairs trading is that a currency can be both rising and falling at the same time. The euro in forex trading is a good example right now. It is falling against the dollar, but it is -- at the same time -- gaining against the U.K. pound. Therefore, you would short the euro when trading it against the dollar, but go long on it when trading it against the U.K. pound.
| Topic Tags: currencies, currency pairs, currency trading, euro forex trading, forex trading, FX market, pairs trading, trading FX market | |
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