Foreign exchange trading or forex trading is perhaps one of the easiest ways to gain financial independence in the modern world. Many people are attracted to forex trading as a profession since it provides immense flexibility and a way to earn copious amounts of money.
However, reaching a point of experience as a forex trader takes a lot of time to build expertise. If you want to learn forex trading, you should be familiar with many complex forex terms such as cable or currency pairs. Let’s dive into the definition of one such forex term in this blog called cable.
What is the cable?
Cable is a colloquial or slang term used for the exchange rate between the British Pound Sterling (GBP) and the US Dollar (USD). The word is used quite commonly among forex traders and traces its reference to the telegraph cables laid between New York and London which were used to communicate currency quotes.
The slang has picked up in its popularity since both GBP and USD are considered dominant currencies. Therefore, the currency pair is quite stable and often in demand.
What else should you know about the cable?
You should remember that cable is only used in reference to the GBP when it is traded against the USD. Quotes of GBP against other currencies like INR (Indian Rupee) or JPY (Japanese Yen) will not be referred to by the term cable.
Thus, when you hear a statement like ‘Cable is up this week,’ it means the value of GBP against USD is more this week.
What is the historical significance of cable?
Cable is historically important since the British pound is one of the oldest currencies in the world. In the early 1900s, it was the world’s most dominant currency in the early 20th century. However, the US Dollar gained immense value during the 1940s. Thus, cable gained immense significance as a currency pair since then.
How can you learn about other forex trading terms?
Forex trading involves many other complex terminologies and concepts which are integral to understanding markets and making profitable trades. You can hope to be a successful trader only if you have a vast arsenal of expertise in forex markets and concepts.
Here are a few ways in which you can learn about forex trading terms.
- Forex trading courses
- Online trading journals
- One-on-one interactions with serious or experienced forex traders
- Following the latest updates about international forex markets
- Practicing trading simulators
- Reading diverse literature on forex trading
Enrolling in a comprehensive forex trading course is perhaps your best bet since it would also involve you engaging in the other tips. A comprehensive course can give you a strong theoretical foundation and plenty of practical experience. It can also help you connect with trading experts and learn from their experiences.
Invest in a good forex trading programme from a reputed trading school today to become an established forex trader.