A Foreign exchange or Forex quote is the rate of exchange of one currency in another currency. The most common form of a Foreign exchange is a direct quote where the Forex dealer compares the price of one currency against another in terms of the same domestic currency. An indirect quote is where the dealer gives you the price of one currency and buys you the other at the same time. Both these forms are used across the world for transactions.
When you use the indirect quotation, it gives you an idea about the rate of exchange of the currency needed to purchase the foreign currency required. The price of the item is in US dollars and the value of the currency in the domestic currency is usually equal to the price of the item in US dollars. The difference between the two values is the foreign currency required. In order to determine the exact amount, it is usually necessary to get the exact conversion rate.
Many traders use the indirect quotation system. They buy the foreign currency needed at a low price and sell it back at higher rates later on. They are able to do this because the amount they bought is much lesser than the amount they later sell it. The difference between the two figures is the foreign currency required. The direct quotation system is quite different from the indirect quotation system. Here, the dealer gives you the price of the item and you later buy it from another dealer for the same price.
A Japanese yen is one of the major currencies used around the world by most of the commercial traders. The majority of people use the Japanese yen as their local currency. The trading price is determined with the Japanese yen rate. So if you need to know the exchange rate of any other currency like the British pound, you will need to get the quotation for that currency with the Japanese yen rate.
In order to know the exchange rate of the domestic currency with the foreign currency, you can either refer the local newspaper or you can visit the websites of some financial institutions. When you refer the newspaper, you have to make sure that you mention the name of the country whose currency you are going to trade. If you mention the name of a country whose currency you wish to trade, then the quote will be in Japanese yen. It is also possible for you to trade in other currencies besides the Japanese yen. For instance, you can trade in euro or in pounds.
When you refer to the websites of the financial institutions, they will give you the rates for trading in a number of currencies. But you have to be very careful when you do so. Never make the mistake of providing the wrong information or figures on the website or you will not get accurate quotation. For instance, if the price you provide in the quotation is much higher than the price you get from the foreign exchange broker, you will end up losing your money. So it is always better that you discuss with the foreign exchange broker directly instead of providing any figure online.
There are three different types of foreign exchange quotations: the direct, the indirect and the counter currency quotation. The direct quotation is done without the intervention of the bank. This is a quick and a non-time consuming type of trading. This type of trading involves the selling of one currency and buying another at a much lower price. On the other hand, the indirect quotation involves the trade in two currencies.
However, it is possible for you to trade in only one type of foreign currency through the indirect quotation. In this case, you are allowed to trade in two currencies and receive the debit for the former currency and the credit for the latter one. On the other hand, it is also possible for you to trade in both the currencies using the indirect quotation. If you want to know about all the three types of foreign currency trading, you can consult the websites of the banks. They will give you more information on the various types of foreign currency trading.