Forex Trading is trading currencies from different countries
against each other. Forex is acronym of Foreign Exchange.
against each other. Forex is acronym of Foreign Exchange.
the Euro (EUR ) and in the United States the currency in
circulation is called the US Dollar (USD ). An example of a
forex trade is to buy the Euro while simultaneously selling
US Dollar.
This is called going long on the EUR/USD.
How Does Forex Trading Work?
Forex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change in value and place a l trade
accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200
USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen t end your trade at that point, you would have a $100 gain.
Forex trades can be placed through a broker or market
maker. Orders can be placed with just a few clicks and the
broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain. This
can all happen literally within a few seconds.
How Does Forex Trading Work?
Forex trading is typically done through a broker or market maker. As a forex trader you can choose a currency pair that you expect to change in value and place a l trade
accordingly. For example, if you had purchased 1,000 Euros in January of 2005, it would have cost you around $1,200
USD. Throughout 2005 the Euro’s value vs. the U.S. Dollar’s value increased. At the end of the year 1,000 Euros was worth $1,300 U.S. Dollars. If you had chosen t end your trade at that point, you would have a $100 gain.
Forex trades can be placed through a broker or market
maker. Orders can be placed with just a few clicks and the
broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your trade, the broker closes the position on the Interbank Market and credits your account with the loss or gain. This
can all happen literally within a few seconds.
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