How do you make the most of your money? Do you put it in a bank, open a time deposit account, or invest it in assets such as stocks and bonds? All these are great, but you can also seriously consider foreign exchange.
Forex trading is now one of the biggest investment processes in the world today, earning billions on a daily basis. Besides the fact, hundreds of currencies are participating, there are also millions of traders composed of individuals, companies, and even governments.
These days too there are already several tools to help you in forex trading, including a forex converter.
Because prices of currencies can help determine if you win or lose money in the transaction, it is very important you know the value of the currencies being traded. This is where a forex converter tool comes in.
The meaning of forex converter is actually right in its name. It converts currencies. But to understand this better, let us explain further. When you are into trading foreign currencies (buying and selling), there are two currencies involved called the currency pair. You have the base currency or the one you have and the quote currency or the one you want. You
also encounter terms such as bid and ask price. Both of these depend on
the currency pair. To bid means to sell while to ask means to buy currencies. The difference between the two is known as the spread, and
that is what the broker earns from every transaction.
It is very easy to use a forex converter. Normally it involves two things: base and quote currency. To determine your preferred currencies, just use the drop-down menu and choose from the list. Then press Enter. The tool will be the one to generate the prevailing exchange rate based on the various market data.
Nevertheless, some of the best online brokers and websites give you more than just exchange rates. First, they already provide you with the bid and ask price. Hence, you can easily decide whether it is time to sell, keep, or buy currencies. Second, you can check out both historical and real-time exchange rates. Since the forex market does have trends, you can utilize these data for smarter speculation.
Currencies are represented by 3 letters which are their ISO symbols. To make it more convenient, though, these tools also include the full name of the country.
You may encounter obsolete currencies or those that are no longer in use. They are still included, however, since there are still traders who hold or own them. These include Belgian franc, Spanish peseta, and Cypriot pound, which have all been replaced by euro (EUR).
There’s no need to download forex converters. Many of them can also be accessed through your mobile devices such as the smart phone to ensure even those who are usually on the move can trade or at least keep track of the changes in currency rates.
Your parents may have told you about putting money in the bank so it can grow by earning interest, but there are other methods on how to leverage your income and earn passively. In fact, these strategies, though high risk, are incredibly high yielding it isn’t impossible to earn loads of money in only a very short amount of time. One of these is through forex trading.
As its name suggests, forex trading or currency trading is all about exchanging currencies in a market. It is currently participated by numerous countries, individuals, companies, and even governments. The main idea of currency trading is to earn base on the increase of whatever currency you have. If the market prices of currencies are down, then it would be the time for the traders to buy and sell higher later or to build infrastructure or import goods from countries with more affordable currencies.
If you’re into forex trading, then you’ll definitely come across with currency pairs, such as this: AUD/EUR=1/40.5. (The base currency is always equals to 1.) The base currency is the one on the left, while the quote currency is on the right.
Using the example above, you can then imply that you’re trying to exchange your Australian dollars with a euro, and the exchange rate for every AUD you trade is 40.5 euros.
You need to keep in mind the base and quote currency since both of these elements is found in a currency converter. As you can already understand from the name, the tool basically helps you convert currencies with great ease. You don’t have to scan newspapers and trading magazines anymore, which was the case before. If you’re worried that the figures or exchange rates aren’t accurate, you then should know that currency converters do analyze various factors data from the market.
Online trading platforms already include a currency converter, but if you cannot find one or you need to use the tool right now, you can do a simple online search. Now the currency converter should have two columns: the base and the quote currency. Using the drop-down list, identify the currency you have (base) and the currency you want (quote). Press Enter. The currency converter will then provide you with the exchange rate in no time.
A good currency converter can also provide you with the best selling (bid) or buying (ask) price, so you can decide whether to keep, get, or sell your current currencies.
A currency converter can be found online and is web based. In fact, there’s no software to download. If you’re planning to use the tool in the future, all you have to do is to bookmark the page. You can also add a widget in your webpage.
Nevertheless, some trading experts and software developers have now created a mobile version for some of them. Thus, you can now keep track of exchange rates even when you are on the road.