This is chapter number 7 out of 7. Read the rest:

Read A Brief Guide to Trading the EUR/USD - Chapter 1: An introduction to Forex

Read A Brief Guide to Trading the EUR/USD - Chapter 2: The EUR/USD currency pair

Read A Brief Guide to Trading the EUR/USD - Chapter 3: Reasons for trading in Forex

Read A Brief Guide to Trading the EUR/USD - Chapter 4: Forex Quotes

Read A Brief Guide to Trading the EUR/USD - Chapter 5: Fundamental Analysis for Trading EUR/USD

Read A Brief Guide to Trading the EUR/USD - Chapter 6: Technical Analysis for Trading Forex

If you have noticed, our discussion about Forex trading is mainly focused on the US Dollar. Actually Forex trading is all about the US dollar. The central banks around the world hold trillion of US Dollars. Most international trading is also conducted in US dollars.

In fact, about 90% of all Forex transactions involve the US dollar. Regardless of what major currency pair that you are trading in, the US dollar is part of that pair. As such, most traders just focus on the US dollar as the main currency to trade in. Another reason is the liquidity of the US dollar. If a currency is rather illiquid, it will be difficult to make any money from trading in it as its price does not move very much.