When We Talk About The Forex Rate, Were Talking About The Relative Value Between Two Currencies -- How Many Of One The Other Is Worth, In Other Words. For Forex Traders, The Forex Rate Is The Basic Information They Use To Do Their Job. The Rate Is To A Forex Trader What Nails Are To A Carpenter.If You Plan To Get Involved In Forex Trading, Reading And Understanding The Forex Rates Is Absolutely Vital To Your Success, Like Learning The Basics Of Addition Before Becoming A Mathematician. A Forex Rate Is Always Expressed In Pairs, Followed By A Number. The Number Is How Many Of The Second Currency Youd Get For One Of The First One. For Example, You Might See USDEUR: 0.7928. That Means That One U.S. Dollar Is Currently Worth .7928 Euros. If You Were To Exchange 100, Youd Get 79.28 Euros For It. Since The Number In This Rate (0.7928) Is Less Than 1, That Means The Second Currency Is Currently Stronger Than The First One -- That Is, The Euro Is Stronger Than The U.S. Dollar. Forex Traders Look At Rates Constantly Throughout The Day. They Carefully Examine Trends In Various Currencies Performance, Noting Which Are Going Up And Which Are Going Down. If A Rate Suggests, Say, That The British Pound Is Starting To Increase In Value Compared To The Euro, A Trader Might Swap His Euros For Pounds. Then, When New Rates Show The Pound Has Become Very Strong, He Can Swap Back Again, Turning A Profit Because The Pound Is Now Worth More Than He Paid For It. Forex Rates Are Available Everywhere On The Internet. Casual Observers To The Forex Trading Industry Might Glance At Them For Reference On Hundreds Of Different Web Sites. Regular Traders, Though, Usually Own Software That Keeps Them Up To Date On Rates Throughout The Day, Without Having To Visit A Particular Site To Get Them. This Is Important, Because Rates Change Constantly, And Can Be Influenced By A Wide Variety Of Economic And Political Factors. The Overall Change Over The Course Of A Day Usually Isnt More Than A Few Percentage Points Either Way, But There Are Minor Changes Regularly, And Those Minor Changes Add Up In The Long Run. Experienced Traders Watch The Rates For Those Tiny Fluctuations, Carefully Observing Whether There Is A General Upward Or Downward Trend That Requires Their Attention.
