Forex exchange rate is the ratio of the price of one currency relative to another. A couple of decades ago, the rate of any currency could be learned only from financial news on television or radio, but at the present time, everything is much easier and more convenient when working on the currency market.
Absolutely all exchange rates can be seen in real time in the trading terminal (for example, Metatrader 4) for any currency pair. Moreover, it is realistic to see not only the current quotations of currencies as separate numbers but also to observe the sequence of changes in exchange rates for any past time period and in the form of a price chart.
Forex exchange rates of different market participants may differ slightly, and then only for a short time. Due to the strong competition in the Forex market, many banks and other financial institutions cannot set prices alone. If any bank wants to sell the currency more expensive than other banks do, then none of the market participants will buy more expensive if you can buy cheaper in another place.
How to understand what currency quotation means?
The quotation of one currency, or the exchange rate, means the value of the monetary unit of one country relative to the currency of another state. Therefore, if you are interested, for example, in the exchange rate of the American dollar (USD) to the euro (EUR), then the Forex quote will look like this: EURUSD 1, 1314.
This is called a currency pair. The currency to the left of the fraction is base, and to the right - quoted or counter currency. The base currency (in this case, the American dollar) is always equal to one monetary unit, and the quoted currency (in this case, the euro) is how much you can buy one unit of the base currency. The above quote means that one euro is selling for 1, 1314 US dollars.
World currency exchange rates are monitored in fairly large-scale electronic trading systems, such as EBS or Reuters. Therefore, all major market participants have access to these quotes but do not have the ability to arbitrarily set their own Forex exchange rates.
Forex exchange rates change every second. Therefore, it is very difficult for any trader to get used to the market. Not infrequently, novice traders are late to make a correct analysis of Forex exchange rates and lose their initial capital.
In order to become a professional in the field and be successful in the Forex market, a trader needs to analyze this parameter qualitatively and quickly, as well as to possess certain analytical qualities.
Therefore, almost all trading strategies in the Forex market explain that a trader must initially rely on his reason and never on emotions and feelings.