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The forex market is similar to other currency markets in that each currency is traded in pairs. Also, the popular treaties tend to be those from the countries with economic stability and also liquid treaties. What this means is that when a country, like the US for example, is a large, politically strong country with a strong economy that makes the US dollar the most actively traded currency on the world market. There are generally eight different currencies that are active on the forex market and they include: the US dollar, the Canadian dollar, the British pound, the euro, the Australian dollar, the Japanese yen and the New Zealand dollar and the Swiss franc.

As mentioned treaties must be traded in pairs essentially make twenty-seven different currency pairs that can be created from the eight mentioned. While, this may be so, the reality is that about eighteen currency pairs are the ones that are conventionally quoted by forex market brokers. These pairs are:

USD / CAD EUR / JPY
EUR / USD EUR / CHF
USD / CHF EUR / GBP
GBP / USD AUD / CAD
NZD / USD GBP / CHF
AUD / USD GBP / JPY
USD / JPY CHF / JPY
EUR / CAD AUD / JPY
EUR / AUD AUD / NZD

The amount of trading with the currency in these eighty pairs is reflective of a majority of the trading done on the forex market. This set up makes trading easier to track and easier to get into, especially compared to equities, which could have thousands of combinations to choose from and be completely overwhelming to a newcomer.

When you are looking to get into currency trading and want to be a part of the forex market, it's important to learn as much about the market as you can and that should include the most common currencies that are traded on the forex market. The forex treaties are directly reflective of what's going on in the countries that represent them and this can be worked into your trading techniques to make the most money at the right time if you are familiar with the process. Take the time to ask questions and use software and trading demos before buying in to make sure you are comfortable with forex trading before investing a large amount of your hard earned money.

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Source by Jayda Kaycee