Conversion forex is one of the most lucrative Forex strategies. It involves taking a simple currency such as the EUR/USD or GBP /USD and turning it into USD. It has been a proven fact that the major currency pairs are the ones that perform the best in most trading transactions. As such, those who have the skill and the inclination to be adept in interpreting data are at a slight advantage.
If you are just starting out in the forex market as a beginner, it is advisable to start out with a currency converter. You can get your hands on any number of them over the internet. The most common among them are the USD to EUR and GBP to USD. Be careful not to be lured by too many of these online calculators. Instead, focus on a single one and master it.
Once you have mastered this skill, go ahead and use the tool to find conversion rates for the currencies you are studying. This will save you time as there are more accurate calculations that you will be able to make using the tool. You should also try to check on conversion rates for some other currencies such as the Japanese Yen and the Australian Dollar. If the latter two are included in your currency conversion study, the results will be quite revealing.
In order to get the best value for their money when dealing in currencies, most people need to determine which currency is more likely to appreciate in value. It could be either the EUR/USD or the GBP/USD. In order to determine which of these is the better currency to deal in, you can try to determine its long-term performance in relation to its buying power. One way of doing this is by looking at the conversion rates of this pair during certain times of the year. For instance, the euro has appreciated significantly against the dollar over the past year or so. Hence, it would be a good idea to consider trading the EUR/USD at its higher point over the summer months when the exchange rate tends to increase.
Similarly, the GBP has appreciated against the USD over the past year and a half. This has been a result of the economic situation in the United Kingdom which has been declining consistently over time. If you are able to determine the right time to trade in GBP, then you will definitely benefit from the exchange rate fluctuations. However, if you are still learning the ropes in currency trading, it would be better to stick with the EUR/USD. This is because the currency values of both the currencies tend to move in tandem when they are compared at the same time.
The major thing that you should remember about the Forex conversion is that it is based on pairs only. Anything other than that may prove to be quite disastrous. For instance, if you were to deal in pairs other than the EUR/USD, such as the USD/JPY, the exchange rate will be affected by the country's policy towards foreign currencies. For instance, if a country decides to peg the GBP against the EUR, or vice versa, this could seriously impact the value of the currency in both markets.
One of the major advantages of the Forex currency conversion is that you can use it anytime, anywhere. You can do this even while traveling from one country to another. It is also very convenient as all you need is a laptop or an internet enabled computer. If you prefer, you can even do the conversion online using your home computer.
Another advantage of the Forex currency conversion is that you are able to analyze the trends quite well. Trends are basically patterns in the movement of the prices. If you can find these trends, you will know exactly when is the right time to convert your currency to another. In the present market, when there are so many variables affecting the rates, being able to identify them is extremely important. However, if you have a little bit of experience under your belt, then you can decide for yourself which currency pairs to convert.