The following extract is from a series of investment-related articles, tips, videos and information on supplementing your income with forex trading systems …

The first time that most investment trading beginners pull up forex quotes and try to interpret them can be perplexing for those who are only familiar with ordinary stock exchange quotes. The only real similarity between common stock quotes and forex quotes is the nature of the information that they provide. While a forex quote does, ultimately, tell you the price, it is not as cut and dry as it would be with ordinary stock and requires some interpretation.

There are several lines of information included in forex quotes. The top line indicates some very basic, but crucial, information. In the same way that a common stock quote begins with a company's ticker symbol, a forex quote starts by identifying the currencies that would be involved in the trade. For instance, if a forex trader saw a quote that began USD/JPY then he would immediately know that the quote is using US Dollars to buy Japanese Yen. If the quote read JPY/USD then the Yen is the base currency that is being used to buy US Dollars.

The second part of forex quotes that you need to look at is the pricing portion of the quote. To continue the example from above, if the quote read USD/JPY=117.57, then the trader knows that for every 1 US dollar he trades, they will get 117.57 Japanese Yen in return. While this may seem really uncomplicated, there are a few more details of these quotes that a forex trader needs to take note of before making the foreign exchange trade.

Following the initial line of the quote, which contains the two currencies that form the cross and the exchange rate, is another line of information. This is probably more familiar to common stock traders. Bid prices and ask prices, which make up an integral part of forex quotes, function in trading forex much the same way. The bid price is the price at which you can sell the currency. In other words, that is the price that people are willing to buy it. The buy price is what you will have to pay if you want to buy the currency. There is usually a difference between these two numbers, but it is seldom substantial.

There are over sixty currencies listed on most major forex trading platforms. As you look through most of the forex quotes actually traded though, you will notice that over 85% of them include some combination of the US Dollar, Japanese Yen, Euro, Canadian Dollar, Swiss Franc and the Australian Dollar. Known as the majors, these six currencies make up the backbone of foreign exchange trading. Historically, they are the most heavily regulated, and as a result, the most stable currencies in the world. This stability makes them safer investments than some other currencies. The feeling of security by investors results in much higher trade volumes.

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