Category: Education

Forex Education

If you’re new to forex trading, one of the first things you’ll encounter is the concept of currency pairs. In the foreign exchange market, currencies are always traded in pairs—meaning you’re simultaneously buying one currency and selling another.

In this guide, we’ll break down the three main types of forex currency pairs: Majors, Minors, and Exotics. Understanding the differences between them is crucial for making informed trading decisions.

What is a Currency Pair?

A currency pair consists of two currencies:

• The base currency (the first one listed)
• The quote currency (the second one listed)

For example, in the pair EUR/USD:

• EUR = base currency
• USD = quote currency

This pair tells you how much of the quote currency (USD) is needed to buy one unit of the base currency (EUR).

1. Major Currency Pairs

Majors are the most traded currency pairs in the world. They include the US Dollar (USD) and have high liquidity and tight spreads.

Key Features:

• High trading volume
• Low spreads (lower trading costs)
• Strong liquidity

Examples:

🔎 Tip: Major pairs are ideal for beginners due to their stability and availability of information.

2. Minor Currency Pairs

Minor pairs (also called cross currency pairs) do not include the US Dollar but involve other major currencies.

Key Features:

• Moderate liquidity
• Slightly higher spreads
• Still commonly traded

Examples:

Minors can offer more diverse opportunities, especially during regional market hours.

3. Exotic Currency Pairs

Exotic pairs combine one major currency with a currency from an emerging or smaller economy (like South Africa, Turkey, or Thailand).

Key Features:

• Low liquidity
• Higher spreads and volatility
• Riskier but potentially more rewarding

Examples:

Exotic pairs are best suited for experienced traders who can handle volatility.

How to Choose the Right Currency Pair?

Your choice of currency pair should align with your:

• Trading experience: Beginners often start with majors.
• Risk appetite: Exotic pairs have higher risk and reward.
• Trading strategy: Some strategies work better in volatile pairs, others in stable ones.
• Market knowledge: Understanding economic and political news that affects certain currencies can give you an edge.

What Is Forex?

Forex stands for foreign exchange, and it refers to the global marketplace where national currencies are bought and sold against one another. For example, when you exchange AED for USD while traveling, you’re participating in the Forex market.

However, most Forex trading is done electronically over-the-counter (OTC) by investors, banks, and institutions looking to profit from price changes in currency pairs.

How Does Forex Trading Work?

In Forex, currencies are always traded in pairs — for example, EUR/USD, GBP/JPY, or USD/JPY. The first currency is the base currency, and the *second is the quote currency. The price tells you how much of the quote currency you need to buy one unit of the base currency.

Example:
If EUR/USD = 1.1000, that means 1 Euro = 1.10 US Dollars.

Who Trades Forex?

Forex trading is open to:

• Banks & Financial Institutions
• Governments & Central Banks
• Corporations
• Retail Traders (individuals like you)

At JKV Global, we assist individual clients and businesses in entering and navigating this dynamic market confidently.

When Can You Trade Forex?

One of the unique advantages of Forex is that it’s open 24 hours a day, 5 days a week, due to global time zones. The market is divided into four major trading sessions:

• Sydney
• Tokyo
• London
• New York

This means you can trade almost anytime — perfect for those who need flexibility.

Why Do People Trade Forex?

People trade Forex for various reasons, including:

• Speculation: Profit from price fluctuations
• Hedging: Protect against currency risk
• Investment Diversification
• Global Business Transactions

 What Affects Currency Prices?

Several factors influence the rise and fall of currency values:

• Interest Rates
• Inflation
• Political Stability
• Economic Reports
• Geopolitical Events

Traders analyze these elements using technical and fundamental analysis to make informed decisions.

What Do You Need to Start Trading Forex?

Getting started is easier than ever. Here’s what you need:

1. A Forex Broker (JKV Global offers support in broker selection)
2. A Trading Platform (like MetaTrader 4 or MetaTrader 5)
3. An Internet Connection
4. Capital to Invest
5. Education & Strategy

JKV Global provides resources and personal guidance to help you build your Forex knowledge step by step.

Conclusion

Forex trading can be a powerful way to grow your wealth and financial knowledge — but it requires education, practice, and discipline. At JKV Global, we are committed to helping new and experienced traders succeed in the Forex market.