A Forex Currency Cross Pair is one of the newest additions to the Forex Trading market. In the past you could not make a trade unless it involved the U.S. Dollar. This means that if you wanted to trade between two currencies you would first need to convert both of the currencies into U.S. Dollars. The trade would be made and then it would be converted back into the currency that you wanted, which to be honest is a pretty long winded process. However, with a Forex Currency Cross Pair, times have changed and now there are more options to trade nowadays. Let’s take a little look.
To put it simply, a Forex Currency Cross Pair means trading directly between two currencies without needing to convert to USD first. Which nowadays means that there are a lot more trades available, and for the most part it makes it easier to make money as now you will be able to spot patterns far easier in the currency exchange market. You can change into pretty much any currency that you want, although nowadays the most popular ones are those that include the Euro, British Pound and Japanese Yen.
In the past you would needed to have worked out the Forex Currency Cross Pair rates yourself, but to be honest, nowadays it isn’t necessary. The majority of platforms out there will calculate the price for you. It is simply up to you to decide whether to make a decision based on the facts and figures that you have at your disposal. However, for the sake of completeness, let’s take a little look at how you can work out the rate for yourself.
The first thing that you are going to need to do is work out what the BID and ASK price is for the currencies that you are looking to change between. You want the BID and ASK based on the conversion to US Dollars as this is going to be common between the two of them. For example, if you are trading GBP to JPY you would need the following:
To work out the ‘BID’ price, you simply need to multiply the two ‘BID’ prices between the two of them together. If you want the ‘ASK’ price then you do the opposite with the other two figures. It really is that simple, and it is worth knowing this if you are going to look into Forex Currency Cross Pairs a lot.
That’s really all there is to knowing what these pairs are all about. Once you have worked out the basics there is so much more you can do with it, including making a lot of money and any person that wishes to make a lot of money when it comes to Forex trading absolutely needs to know this information. There is plenty more information available out there for trading between the two, so it is something that is worth looking into.