Trading the Euro and the Swiss franc
EUR/CHF is basically the foreign exchange ticker symbol representing the value of the Euro against that of the Swiss franc; telling traders the amount of Swiss Francs needed to purchase a Euro. The Euro is currently the second most traded foreign currency in the globe and the Swiss franc currently sits at the top ten, based on the Bank for International Settlements. Forex trading is one of the largest markets in finance, trading billions of dollars each day. With this in mind it’s no surprise that many traders have become interested in learning how to trade the forex.
When you study trading the forex, you will soon discover that there are five major currency pairs involved. These currency pairs include; EUR/SECTOR, EUR/GBP, USD/CAD, GBP/USD and GBP/JPY. Studying the charts and technical analysis are also important when you begin trading the forex. The major currency pairs are particularly complex and have different time related pricing. This is one of the reasons why many people choose to use professional traders instead of just learning to trade their own currencies.
The first thing any trader needs to know is what currency pairs are being traded. The two major currency pairs EUR/SECTOR and EUR/GBP are based on the same trading system, the London Fixing of the European Central Bank (LCB). This means that they use a base currency that changes with time. For example, if someone buys Swiss Franc’s and wants to sell them for the Euro, then the person would buy the base currency EUR and then sell the base currency EUR/SECTOR for the Euro. There are numerous online brokers available who offer Swiss-based Forex trading accounts.
The rate of exchange between the two currencies is also very important to be aware of. This is known as the FX rate, and is usually updated by the Bank of England and the CFTC. The Euro and the US dollar are the two official currency pairs that are traded on the Forex market. Trading the forex pair is simple, since both pairs have the same price on the market.
Many traders focus their trading strategies on one or two currency pairs at the beginning, and then they add on to their capital as they go along. This type of trading is known as “Forex Scalping”. This method works well for novice traders because the rate of exchange between the two currencies is not particularly high. Experienced traders use this method to make a substantial profit.
Traders who deal in the euro may also be interested in trading the Japanese yen. Although it is not the most popular currency pair, many traders see the potential in trading the Japanese yen. The reason why it is not as popular is because the interest rates between the two currencies are not exceptionally high, making it less lucrative to trade. On the other hand, traders who know how to trade the japanese yen are able to profit rather quickly. They are able to take advantage of small differences in interest rates between the two currency pairs to earn a profit.
As mentioned earlier, when trading the euro and the japanese yen, the currencies are different from each other, so traders must use a different strategy than they would if trading the euro and the US dollar. Traders who are familiar with trading the euro will find it easier to trade the japanese yen due to its higher interest rate compared to the euro. However, traders must remember that the euro is a stronger currency pair than the japanese yen and they need to decide which currency pair they wish to trade. Even though trading the euro can be a profitable strategy, it requires knowledge of both the euro and the japanese yen in order to profit from trading them.
The euro and the Swiss franc continue to be a popular option for traders. Traders have a good understanding of both currency pairs and they are able to make an effective decision when trading which currency pair they should trade in. Traders also benefit due to the fact that trading the euro and the Swiss franc is no longer as hard to do as it once was due to the low interest rates between the two currencies. This allows traders the opportunity to gain more profit from their trades.