what is forex exchange?

Spot Market and the Forwards and Futures Markets

You would sell if you think that the price of the euro is going to fall against the dollar, so you can buy back your €1 for less than the $1.30 you originally paid for it.

More specifically, the spot market is where currencies are bought and sold according to the current price.

Take another example. Suppose the spread for EUR/GBP is 0.8414-0.8415. If you think the price of the euro is going to rise against the pound you would buy euros at the offer price of 0.8415 per euro.

Hii

Conquer the basics of foreign exchange trading and learn the specific skills and knowledge needed to become a successful currency trader with Investopedia Academy's Forex Trading for Beginners course.

The forex market consists of a range of forex pairs.

Say in this case you buy €10,000 at a cost to you of £8415.

Listen my dreams

Each pair represents the exchange of one named currency into another named currency.

Your profit on this transaction is £8532 minus the original cost of buying the euros (£8415) which is £117. Note that your profit is always determined in the second currency of the forex pair.

Alternatively, suppose in the first instance you think the price of the euro is going to fall, and you decide to sell €10,000 at the original bid price of 0.8414, for £8414.

I don't know

Each pair represents the exchange of one named currency into another named currency.

In this case you are right and the spread for EUR/GBP falls to 0.8312-0.8313. You decide to buy back your €10,000 at the offer price of 0.8313, a cost of £8313

I really not you listen

The cost of buying back the euros is £111 less than you originally sold the euros for, so this is your profit on the transaction. Again your profit is determined in the second currency of the forex pair.

Spread betting lets you buy or sell any forex pair for a certain amount relative to any movement in the price.

Cool

This is a simple way to track your profit and loss against the movement of forex prices, without having to convert amounts from one currency into another.

Amazing guys

CFD trading replicates more fully the process of exchanging one currency for another.

Uses some new words

in that you can increase the rate of return on your initial capital

You should note, however, that this leverage similarly increases your level of risk, and that you can lose more than the initial deposit you use to open your position.