With so many articles, books, and learning tools out there for forex, you might find it hard to choose one particular source over another. This is okay because often there is going to be a different way of looking at the same topic. Take FX converter as an example. In the strictest sense it is an online platform offering you forex rates on a currency pair of your choice, for the express purpose of trading in one currency for another in a travel situation. Online trading platforms in which you invest in currency pairs are either called forex platforms or forex systems. The word converter is generally relegated to the over the counter concept of foreign exchange. Yet, you could look at yourself as a converter.
FX Converter: You Trade Money
Each time you buy one currency and sell another whether in the OTC or spot forex market you are converting currency. If you consider the definition of FX converter by saying that a converter is someone or something that takes one thing and converts it to another, it makes you a converter of the forex market.
You intend to trade currencies to make money. The only difference between an online converter and you is the electronic concept. A converter giving you the forex rates for pairs still has a fee when you actually go to get one currency with your local currency. When you look at it this way things don’t really change all that much. It just provides a new perspective on how to look at an FX converter.
FX Converter Reveals the Pip Changes
In forex there is a concept called the pip. The pip is the smallest increment a forex rate will change by or .0001. Japanese pairs are denominated differently, so you will see .01 as the change given more numerals are before the decimal. A converter with online rates will show you the current prices, fees associated with the bank running the site, and help you see what it would cost you to trade into more than one currency with your local currency if you want.
Most of the time you are looking for a specific pair thus you want to know what it is for the exchange. The FX converter is different to the platform because ISO designations do not matter. ISO or International Standardisation Organisation decided long ago what the base and quote currency should be in a pair. It was thought the strongest currency should be the base. Thus the pairs are shown this way for foreign exchange investments. With an FX converter you care less about the ISO because it is for an over the counter transaction in which you will convert one currency for another.
In terms of the pip change this determines the rate movement, thus the amount of money you will spend to get a different currency as a converter. In forex trades it is the pip that determines your profit. 150 pips of a movement can be quite handy, but for travel you do not want such a movement.
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