Assuming you already know what Forex trading is, there are some simple terms you need to know that is used in the Foreign Exchange. These terms can be easily learned and understood with having no experience in the economy or the world of finance.

Investing in the Forex trading market can bring you very high profits but they also come with a big risk. Most of the investments that have a high earning potential also have a high risk. The lower your potential is for earning profits from your investment thelower your risk is.

In a currency pair the currency that is listed first is called the base currency. Most of the time it is the US Dollar. In the currency pair the other currency is called counter currency. The quote given for the currencies are in pairs. An example of this is if the quoted pair are the US Dollar and the Japanese Yen then it will look like this: USD/JPY is equal to 1.5. What that means is for 1 USD you can buy 1.5 JPY. If the quote has an increase then the base currency has rose in value, which the value for the counter currency will be weaker.
An example of this is if the quote was like the numbers above but the equal is now 1.6 then what this would mean is the US Dollar got stronger. So you are able now to purchase 1.6 of Japanese Yen with the 1 US Dollar.

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