Know more insight on what is the forex cable?

April 26, 2012 by Adam Woods  
Filed under Investment

In the FX market all the sales, purchase and trading is totally based on the exchange rate of various currency pairs. FX trading is a profitable platform, but there are many terminologies that makes trader confuse. Especially new traders always stuck on many of the terminologies. A very common confusion of many is “what is the forex cable?”

This concept has a relation with the history, actually in the year 1858; steel wire was put in the Atlantic Ocean to setup a link between the exchanges between two cities: New York and London. The purpose of this link was to transfer any fluctuation in the exchange rate between two nations by making use of telegraphically. These exchanges between these nations are now the biggest trading market which has helped in the establishment of the present FX market.

The exchange rate basically defines the unit of base currency which is required to purchase one unit of the other quote currency. It defines the relation between the currencies pairs. With the advancement of technology, it also has given new technologies to the transmission media and hence the transmission once done with wires and cords had been now replaced by satellite and transmission through optical fibres.

Due to high involvement of US dollar in the trading market, it is almost the part of all the major currency pairs and of all type of dealing done in the trading market. The world’s economy is directly related to the FX-GBP/USD and any change in the market directly affects these currencies and this return will affect the exchange rate of all the currencies in the world.

Even the most successful trader in the market also keeps a close watch on the exchange rate and also monitors the situation of market on the basis of the exchange rate fluctuation. Almost every currency and market moves up and down with the exchange rate of these two strongest currencies in the world.

The concept is pretty simple, suppose if the USD goes down then more number of units of GBP could be purchased against the equal number of units of USD. GBP and USD are considered to be the standard of analyzing the market’s future.

According to trading experts, FX market is good in terms of profit but at the same time is involve lot of risk due to unpredictable behaviour. This behaviour is due to the exchange rate fluctuation. To become a successful FX trader it would be better to know what is the forex cable and use of it in the FX trading.

Adam Woods has been trading forexfor 5 years and until then with little success. Adam Woods then joined The World Forex Club where he has gained the Forex Education that he needed to sky rocket his earnings in the forex market.

categories:

Speak Your Mind

Tell us what you're thinking...
and oh, if you want a pic to show with your comment, go get a gravatar!