What exactly is a currency pair ? We’ll begin with the Eur/Usd this has as the base currency the US dollar against the Euro . When I see a price quote of 1.3200 on the Eur/Usd, what does it mean ? The easiest way to remember the answer is this : take the base currency pair , in this case the US Dollar , look at the price quote of 1.3200 , then tell yourself , "it will take 1.3200 US Dollars for me to buy 1 Euro ." The price quote means exactly that . Maybe you look a few weeks later at the price quote and now it is 1.4000 this tells you that the US Dollar is now weaker when compared to the Euro since to buy one Euro you now need 1.4000 US dollars . On the other hand, if the price quote is 1.2500 a couple of months later , then the US Dollar has become stronger because you’ll only need 1.2400 US dollars to purchae a Euro.

Forex trading can become even more challenging when you see a price quote of say 100.50 on the Usd/Jpy pair for example . Using the above method , simply take the base currency of Jpy take a look at the price quote that is 100.50 and this is the amount of Jpy it takes to purchase one US dollar. That is fairly simple, isn’t it ? In the future you shouldn’t have difficulty understanding a pair and its price quote the next time you look at a chart screen or a quote window .

Now that we know how to read the price quotes , what are the main pairs and cross pairs ? Well the main pairs are usually the strongest economies throughout the world versus the US Dollar . Several of the main pairs include the Gpb/Usd, Usd/Jpy, Eur/Usd, and Usd/Cad . Cross pairs do not involve the US dollar which includes the Gbp/Jpy and the Eur/Jpy to name a couple that are popular.

Hopefully you’ll be helped by this article if you’ve been feeling intimidated the forex trading  landscape before . It takes a little getting used to with all the time zones, economies, and currency pairs out there. After you start understanding how everything falls together it really is not too hard – and many of us think it’s actually quite fun !

The forex trading time zones can be both difficult and intimidating to the average trader. Like most traders, when I started out trading this 24 hour global, cash market, the time zones issue never made a whole lot of sense to me. That changed over time however and in this article I will share some basic insights as to how I handle the 24 hour market and hopefully that will help you the next time you’re preparing for your next big day of trading.

The first thing you need to consider is where you live, or where you plan to do most of your trading from. This will be the single greatest factor affecting how you look at this 24 hour market. For the purposes of our example here let’s say that you live in California on the West Coast of the United States in the Pacific Standard Time (PST) zone which is 3 hours behind New York’s East Coast time.

Now that we’ve determined that we are going to do our trading from California, which is 3 hours behind New York, we can begin to plan our forex trading day. In this 24 hour market that never sleeps (but gets very quiet on weekends and major international holidays such as New Years) the trading day stops and resets with the New York financial centers closing at or around 5pm EST and the Far East banking centers of Tokyo, Hong Kong, etc. opening, starting their new day, at about that same time. So with that in mind it is best to set your trading charts up so that the daily bar or candle that you are using closes at 5pm EST every day.

So now we’ve determined that we are trading from the West Coast in the US which is 3 hours behind NY’s Eastern Time and we also know when this 24 hour market stops and resets for the next day. The next thing to consider is when you will get ready and plan for the next day. If you’re living in California, as in our example here, and you’re a night owl then perhaps you’d like to get ready to trade the London session from about 1am PST (4am EST) to 4am PST (7am EST).

Or, maybe you enjoy your sleep and want to doze through the London session but have no problem getting up early, around 4am PST (7am EST) so you can see what the end of the London session looks like and prepare for the start of the New York session which will really get going around 5:30am PST (8:30am EST). Or, finally, perhaps you hate waking up early and so you’d prefer to be a middle of the day trader; no problem. Just wait until around 2pm PST (5pm EST) when the new day in Tokyo starts and you can trade FX during that major market session.

Now you’ve got a clear handle on what the major forex trading time zones are all about and can plan your days accordingly. And remember, planning and preparation are perhaps the two most over-looked, yet important factors of success in any business, including this one.