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Having a good understanding of the change in exchange rates is a basic aspect of Forex. After all, that’s how traders make money!
There are a lot of factors that go into determining exchange rate changes. And it’s always good to review why the graphs on your trading platform move.
Most people have a simple understanding of exchange rates when, for example, they go overseas and have to buy things in another currency.
However, because Forex uses a derivative financial product to engage in trading, there is an extra level of sophistication, and all currencies have to be paired. This is why even though we are interested in factors that can affect a currency in particular, what matters as an FX trader are the pairs that currency is in.
In retail forex trading, you don’t get a bunch of coins and bills delivered to your house each time you make a trade. That would be impractical.
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