Today we are going to talk about the basic things you need to know before you start hitting your platform to trade.
They're the BIG FIGURE, SPREAD, HIGH, LOW and the DEALING RATES.
Below figure shows it all:
Currency Pair: NZDUSD or simply read as New Zealand Dollar vs US Dollar. The rate 0.69993 means it takes .69993 New Zealand Dollar to have 1 USD. Or .700018 means .700018 New Zealand Dollar to have 1USD.
Big Figure, Spread and Dealing Rates
So what's the big figure of the NZDUSD? The big figure is the stem of the dealing rates. The figure above shows two rates the .69993 and .70018 where the stems of each rate are .69 and .70
Why is there a gap in the given rates? Just like your favorite coffee the price in a supermarket (buying) is not the same as the price in the Sari-Sari Store (selling). Meaning if you buy something it is but natural to sell it higher to make money. Now, this gap is what we call spread. In our figure spread should be computed as:
Hence, below should be read as:
Buying: 0.70018
Selling: 0.69993
Or in short it can be read as 99-01(font is intentionally meant to be bigger than the stems); the two rates given is now the dealing rates.
High and Low
High means the highest price NZDUSD reached in a given market trading day; while Low is the lowest price the currency reached in a given market trading day.
Always remember, the variance between your high and low matters a lot in any given day. On an average a certain currency, no matter how volatile can only move as much as 100-150 pips. If it hits the average daily pip variance it will either congest or retrace.
Learn more about congestions and retracements on our next sessions. Thank you for reading. If you want instant update to our new posts, please subscribe to this blog. ➡️➡️➡️
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