What am I doing when I buy and sell foreign exchange?
What is foreign exchange? Forex/FX is a common abbreviation for “Forex”, which is generally used to describe the transactions of investors and speculators in the foreign exchange market.
For example, suppose that the value of the dollar relative to the euro is expected to weaken. In this case, the forex trader will sell the dollar and buy the euro. If the euro strengthens, the purchasing power of buying dollars now increases. Compared with the beginning, traders can now buy more dollars and thus make a profit.
This is similar to stock trading. If a stock trader believes that the price of a stock will rise in the future, he will buy the stock, and if he believes that the price of a stock will fall in the future, he will sell the stock. Similarly, if a foreign exchange trader expects the exchange rate of a currency pair to rise in the future, he will buy the currency pair, and if he expects the exchange rate of a currency pair to fall in the future, he will sell the currency. Currency pairs.