A-BEGINNERS-GUIDE-TO-FOREIGN-EXCHANGE-TRADING
Guide to Foreign Exchanges: What is forex trading and how does it work? Learn how to get started in currency trading. The Forex exchanges allow for 24/7 trading in currency pairs, making it the world's largest and most liquid asset market.
Guide to Foreign Exchanges: What is forex trading and how does it work? Learn how to get started in currency trading. The Forex exchanges allow for 24/7 trading in currency pairs, making it the world's largest and most liquid asset market.
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The Exchange Rate
An exchange rate is the value at which one country’s
currency can be exchanged for another.
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When traders engage with the FX market from a
speculative standpoint, a ‘view’ or ‘bias’ is taken, either
in the form of a long position (a buy) or a short position
(a sell).
Should the EUR/USD, trading at a price of 1.07950,
advance to 1.07980 this indicates the euro advanced
against its US counterpart, increasing in value. Those
long the market will note a profit, while those short will
be at a loss. A decline to 1.07910, on the other hand,
translates to a loss for traders long the currency pair
and a gain for those short.
An important point to remember when executing a
trade in the foreign exchange market is:
Buying a currency pair involves buying the base
currency by selling the quote currency.
Selling a currency pair involves selling the base
currency by buying the quote currency.
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