In foreign exchange trading, every currency is assigned a certain value in relation to other currencies. The values are determined by different factors, mainly to do with the economic performance of the currency’s country of origin. When changing one currency for another during trading, traders need to know how much of one currency is needed to exchange for a unit or more of the other currency. Such calculations are done using an fx converter. Currency values keep changing everyday and traders have to make calculations before entering into any trade.
Since currency values are known to change on a consistent basis, traders need to get the latest currency conversion rates in the market at any given time. Many currency converters are web-based so they get updated through the internet. A web-based fx converter is usually hosted by a service provider. The services can be free or you may be required to pay to use it. There are also currency converters that can be downloaded and installed on your computer, phone or tablet. These fx converters get updated with the latest currency rates any time you connect to the internet with your computer. The mobile fx converters are very convenient if you are always on the go or when travelling. The widget for the downloaded program will appear constantly on your screen so that you can have a quick glance of the latest currency rates at any given time.
How does an fx converter work?
There are different types of currency converters out there with varying designs and features. However, the basic function is the same and the mathematical calculations are fairly straight forward. A typical fx converter will allow you to enter an amount in one currency to be converted into another currency. There are some currency converters that enable you to convert more than one currency at a go. Differences may be seen in the visual layout and user interface of the calculators but they all perform this basic function.
There are currency converters that list over 80 different types of currencies for conversion. In the forex market, you can trade just about any currency pairs that you want. However, forex traders usually have their preferred currency pairs. The U.S. dollar is the most traded currency and forms part of many of the currency pairs traded. As a result, every fx converter will have the USD as one of the currencies listed. Australian traders like trading the currency pairs of AUD/USD and GBP/AUD. You have to ensure that the currency converter you use has the currency pairs that you plan to trade in. It is also prudent to avoid currency converters that restrict the currency pairs you can convert since opportunities can open up in the forex markets for trading different currencies.
When choosing a suitable fx converter, you have to ensure it comes from a reliable service provider. Reliability here has mainly to do with getting the latest currency values on the market. Most of the time, the markets are quiet and currency fluctuations are small. However, even these small fluctuations are very important when it comes to making profits from the trade. You need to trade with real time currency values if you are to get the most out of the markets. A slight delay in updating currency values can see a lot of changes happening in between. Chances are that currency values that were given an hour earlier will no longer be applicable since a lot will have changed since then. You can open several sites that provide currency conversion service on the internet and watch how frequently the currency rates are updated on their currency converters.
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