Forex for Dummies
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In learning about FOREX trading for beginners, know that all FOREX trades are comprised of currency pairs and currency codes.

The pair is made up of two currencies, one being bought and the other sold simultaneously...and each with their own unique 3 letter codes, sometimes referred to as foreign currency codes.

The currency codes for foreign exchange pairs look like this: EUR/USD, USD/JPY, etc.

While simulateous buying/selling of FOREX currencies can be a bit confusing to a FOREX beginner and those used to trading a single equity (ex: stock) or commodity future (corn, soybeans, gold, etc.), try thinking of currency pairs as a single unit.

When foreign exchange trading, you can trade just about any FOREX pair you wish. Some sources estimate that just 14 major currencies represent over 90% of all currency trading.

And within that 90%, a large percentage of FOREX trading (~75%) occurs in just four foreign currencies.

Those currencies are the U.S. Dollar, the Euro, the Japanese Yen and the British Pound. These are known as major FOREX pairs.

Because these 4 currencies are the most heavily traded of all FOREX currencies, the benefits of trading them is twofold:

(1) entering and exiting trades is extremely fast and easy due to massive market liquidity, and

(2) they offer the lowest PIP spread, meaning they cost you the least to trade why buying/selling

The Major Codes and Currency Symbols
As noted above, all FOREX pairs are represented by a unique three letter foreign currency symbols. The top eight most actively traded of these currencies (4 most traded listed first) and their codes are:

- Euro - (EUR)
- U.S Dollar - (USD
- British Pound - (GBP)
- Japanese Yen - (JPY)
- Swiss Franc - (CHF)
- Canadian Dollar - (CAD)
- Australian Dollar - (AUS)
- New Zealand Dollar - (NZD)

The most actively traded major currency pairs and currency codes (the 3 most traded listed first)are:

- Euro / US Dollar - (EUR/USD)
- US Dollar / Japanese Yen - (USD/JPY)
- British Pound / US Dollar - (GBP/USD)
- US Dollar / Swiss Franc - (USD/CHF)
- Euro / British Pound - (EUR/GBP)
- Euro / Japanese Yen - (EUR/JPY)
- Euro / Swiss Franc - (EUR/CHF)
- Australian Dollar / US Dollar - (AUD/USD)
- US Dollar / Canadian Dollar - (USD/ CAD)
- New Zealand Dollar / US Dollar - (NZD/USD)

You can learn more about pair exchange rates and the bid/ask components of FOREX trading pairs in our section on what does FOREX trade mean.

FOREX Pairs Nicknames
If you are a FOREX beginner, you might not know these more popular and heavily traded FOREX pairs have picked up their own nicknames by which FOREX traders may refer to them.

These nicknames can vary from major trading center to major trading center (NYC, London and Tokyo).

Below is a short listing of these FOREX pair nicknames:

Currency Pair Nickname
- EUR/USD "Fiber"
- EUR/GBP "Chunnel"
- GBP/USE "Cable"
- GBP/JPY "Geppie"
- NZD/USD "Kiwi"
- AUD/USD "Aussie" and "Matie"
- USD/CAD "The Funds" and "Loonie

The FOREX history behind the growth of these pairs that has lead to todays FOREX market can be an interesting and informative read.

There is a very unique language in FOREX trading. For beginners it is indeed like learning a new foreign language!

We hope this helps you better understand currency pairs and currency codes that you will encounter in your foreign exchange trading.

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