Hello, this is Robbie Garnier, and welcome to class number three, which is about buying and selling currency pairs. I want to make something clear: I'm not going to delve into overly technical details in these classes because they can be quite dull, and frankly, I'm too cool for that. If you're looking for advanced technical trading knowledge, you'll need to join some advanced classes taught by nerds. But I will give you an overview of the technical aspects of this industry. For more in-depth training, you'll have to find someone else.

Let's dive into class number three. We've already discussed what forex trading is, but if you need a refresher, go back to class number one. Forex trading involves the simultaneous buying of one currency and selling of another. Currencies are traded through a forex broker or a CFD provider and are always traded in pairs. They are quoted concerning another currency. Don't worry about CFDs for now; we'll cover that later. It stands for contract for difference.

For example, currency pairs can be the euro and the US dollar, represented as EUR/USD, or the British pound and the Japanese yen, shown as GBP/JPY. When you trade in the forex market, you're engaging in a constant tug-of-war with each currency pair. An exchange rate is the relative price of two currencies from different countries, and these rates fluctuate based on the strength of the respective currencies.

There are three categories of currency pairs: majors, crosses, and exotics. Majors always include the US dollar. Cross-currency pairs do not include the US dollar, and if they involve any of the major currencies, they're also known as minors. Exotic currency pairs consist of one major currency and one from an emerging market.

Now, let's talk about major currency pairs. These are the most frequently traded pairs and include the US dollar on one side. The EUR/USD pair is the most liquid, meaning it has the most buyers and sellers at any given time. While there are eight major currencies, there are only seven major currency pairs. Compared to crosses and exotics, majors have more frequent price movements, offering more trading opportunities.

Liquidity in the forex market refers to the level of activity, based on the number of active traders and the volume traded. The more a currency pair is traded, the higher its liquidity.

Moving on to cross-currency pairs, also known as minors, these include any two major currencies except the US dollar. They are still quite liquid and offer plenty of trading opportunities.

Exotic currency pairs involve currencies from countries like Brazil, Mexico, Chile, Turkey, and Hungary. They are not as active and, thus, not as exciting to trade.

We also have currencies from regions like Scandinavia, known as Scandis, and Central and Eastern Europe, including the Baltics and the Balkans. Then there are the BRICS countries, which are major emerging national economies, and now we're seeing additional countries joining as BRICS Plus.

To sum up, a currency pair in forex is a pairing of two currencies where one's value is relative to the other. Major currency pairs include the US dollar and are the most traded. Currency crosses are pairs that do not include the US dollar. There are hundreds of currency pairs, but not all are traded in the FX market.

This was a lot of information, but it should raise your FX-IQ. Remember, if you want to delve deeper, you'll need to find a nerd, as I'm too cool for that. Let's review what you've learned with some questions:

What is a currency pair in forex?

It's a pairing of currencies where the value of one is relative to the other.

What are the major currency pairs?

They include the US dollar and are the most frequently traded.

What are the currency crosses?

These are frequently traded currencies that do not include the US dollar.

How many currency pairs exist?

There are hundreds, but not all are traded in the FX market.

This is Robbie Garnier signing off. See you at class number four! Good luck.