Learnt to Read the Foreign Exchange Quote

To have a better insight about currency exchange rate and learn how it affects the value of your Forex investment, we will discuss everything about Forex Quote in this article. The information will also help you to become a more successful trader.
As a Forex trading broker what you have to basically understand is that it is this cumulative buying and selling of a currencies in the Forex market which causes the value of investment to fluctuate. This means they either go down or move up.
There are many factors responsible for such fluctuations in currency exchange rate. Factors like, political and social, fundamental or economic environment of a country, central banks fiscal policy of these countries, interest rate adjustment etc are some of them.
Currencies are always traded in pairs and each currency has its own symbol. Like, for the Euro dollar- the symbol is EUR, Japanese Yen – the symbol is JPY, for the Pounds Sterling - it is GBP, and for the Swiss Franc - it is CHF. Hence, EUR/USD would stand for Euro-Dollar pair. GBP/USD stands for the pounds Sterling-Dollar combination and USD/CHF for Dollar-Swiss Franc pair and so on and so forth.
As a forex trader you will always notice USD always quoted first (with exceptions like Pounds Sterling, Euro Dollar, Australia Dollar (AUD) and New Zealand Dollar (NZD). The first currency quoted is called the base currency. The U.S. Dollar is mostly quoted fist and is regarded as the central currency of the forex market and it is part of majority of the Forex transactions happening across the globe.
So now coming back to our basic lesson - how are these currency pairs quoted on the Forex market and how to read the quotes? The Forex trader will see two distinct numbers on all Forex quotes. The first one is the bid price and the second is offer or asking price.
When you are reading these numbers you will notice that there exists a difference between the bid and the offer price. This difference is what is termed as the spread.
There is another popular term that you will come across called Pip. Pip is the way by which currency profit is measured. PIP stands for price interest point.
The single most important objective of a Forex Trader is to book profits from currency movements and fluctuations in the foreign exchange market. Along with the risks, even the rewards of trading in Forex are huge and the amount of money a Forex trader can earn can be life changing and may ultimately lead to achieving financial freedom that he never even dared to dream of.
But to get there a Forex trader will require an in-depth understanding and training in Forex. This may include understanding concepts such as fundamental analysis, technical analysis, chart pattern and formation, trade management, risk management such as stop loss and profit target and finally money management. Trading beyond your means is a sign of irresponsible and casual approach towards money management and can ruin the trader to the extent that may take him long to recover. But if he builds based on knowledge and information, he is likely to enjoy long term currency trading success and can build wealth of a lifetime.