In essence, one could potentially think of buying a currency almost as buying shares in a country, almost. The value of a country’s currency is directly correlated to all sorts of things, such as the sociopolitical surroundings that affect that currency. For example, if you are buying on the Japanese yen; this means that you are betting that the Japanese economy is only going to get healthier, and isn’t at risk of going south any time soon.
There are all sorts of differing theories that you might have about this: you may believe that it is buffered by a growing technology sector. You might believe that political stability has never been more secure. You might even believe that its latest announcements or partnerships will lead to it spiking up, for a specific reason, or notice how it fluctuates a certain commodity. Regardless – the point is, you are betting on Japan’s health, and so this is much different than buying shares in a company. Let’s take a look at some currencies that you can trade:
USD United States Dollar - Buck
EUR Eurozone Euro - Fiber
JPY Japan Yen -Yen
GBP Great Britain Pound - Cable
CHF Switzerland Franc - Swissy
CAD Canada Dollar - Loonie
AUD Australia Dollar - Aussie
NZD New Zealand Dollar - Kiwi
It should be noted that each currency is distinguished by three letters, and of course, there are various nicknames for currencies, that the advanced trader might use, as well. These are known as the “majors” specifically because they are the most traded currencies in the world, so it is important, before anything, to get familiar with these countries’ currencies, and learn as much information about them as possible, so you have a general idea of their value, and can refer to them quickly and efficiently.