A currency trading course may analyze the details of currency trading in a different perspective. It is similar to a Forex Trading course in many ways. Let us see what is the difference between the two courses?
At first, let us find out some of the currency trading terms. In currency trading, one currency is purchased for another currency. Normally it is expected that the value of purchased currency is appreciated relative to the currency which is sold. Buying a currency is called taking a long position while selling a currency is known as short position.
An open trade position is defined as in which the buying or selling one currency pair is not supported by the sale or purchase of adequate amount of that currency pair to effectively close the trade. In an open trade position, a trader stands to gain or lose due to fluctuations in the price of currency pair. International Standard Organizations code abbreviations are used for quoting currency exchange rates. For Example, USD/INR is for two currencies. The first currency USD is the base currency and the second currency INR is the quote currency. In purchase transactions, it explains how much quote currency you have to pay for purchasing one unit of base currency. In the sale transactions, it defines how much of quote or counter currency you get by selling one unit of base currency.
Currency Exchange Rate
A currency exchange rate is mentioned as bid price and ask price. The bid price is always lower than the ask price. In the above example, 40.50/53, the 40.50 is the bid price and the 40.53 is the ask price. The difference between the bid price and ask price is the spread. In the above case the spread is 0.03. Normally, the spread is mentioned in terms 4 or 5 decimal places. When a currency is directly traded against USD, then such exchange rates are called direct rates, in which the base currency is the USD.
In some transactions, the USD becomes the quote currency and such exchange rates are called indirect rates. Cross rate is that exchange rate in which both the traded currencies are other than USD. Though US dollar does not appear in such rates, the trading is completed by first trading one currency in USD and then trading the second currency in USD. A spot deal or market is defined as a contract in which the delivery of the currencies takes place within two business days. Market order is executed immediately at the market rate. Limit orders are executed at future date on certain conditions.
Forex Trading course
Forex trading course offers details about trading in foreign exchange. It is done under two broad parameters. One is Technical analysis and the other is fundamental analysis. In tech analysis, the past data regarding the rates are analyzed. But fundamental analysis takes in to account the country as a company and analysis various data pertaining to the nation as a whole.