What is Forex Trading?

Forex trading is trading currencies through different countries against the other person. Forex is acronym of Foreign exchange.

For example, in Europe the currency in circulation is named the Euro (EUR) and in america the currency in circulation is named the US Dollar (USD). An example of a forex trade should be to buy the Euro while simultaneously selling US Money. This is called going long within the EUR/USD.

Forex currency trading is typically done through a broker or market creator. As a forex trader it is possible to choose a currency pair that you expect to change within value and place a trade accordingly. For instance, if you had purchased 1, 000 Euros within January of 2005, it'd have cost you close to $1, 200 USD. All through 2005 the Euro’s benefit vs. the U. Ersus. Dollar’s value increased. At the end of the year 1, 000 Pounds was worth $1, 300 U. S. Dollars. If you had chosen to end your trade then, you would have a $100 gain.

Forex trades might be placed through a broker or market maker. Orders can be placed with just a couple clicks and the broker then passes the order along to a partner in the Interbank Market to fill your position. When you close your own trade, the broker closes the career on the Interbank Market and credits your account with all the loss or gain. This can all happen literally within a while.