A Short Explanation Of “Buying” and “Selling” In Forex Trading
These days everyone is talking about a profitable new business called Forex trading and the great opportunity this business presents for people willing to break free from the corporate world and start working from home or anywhere else without losing their current lifestyle and even improve it.
More experienced traders consider the best and most profitable of the capital markets to be the Forex market. For many years, Forex trading was the sole domain of the major banks, large financial institutions and central banks of countries; for example the Federal Reserve Bank of the United States. But these days, thanks to the internet, the market has been open to all who wish to learn the best forex trading techniques and with the intention of making substantial profits like the institutions mentioned above which annually and consistently make quite high profits from trading. in Abroad Foreign exchange market.
You have many advantages when trading on the forex markets, for example; you don't have to worry about the commissions you may have to pay to your broker; furthermore, there are not the usual commissions that futures and equity traders are used to always paying; no exchange or clearing fees, no NFA or SEC fees.
The forex market has five main currencies: US dollar, Japanese yen, British pound, euro and Swiss franc. It is thanks to their great popularity in world commercial transactions and their high activity that these five currencies account for over 70% of North American trade. Of course there are other tradable currencies; include Canadian, Australian and New Zealand dollars. These minor currencies represent 4% - 7% of the total market volume. Together, all of these five major and minor currencies form the backbone of the Forex market.
The concept of "Buy" in Forex refers to the acquisition of a particular currency pair to open a trade and "Selling short" refers to the sale of a particular currency to open a trade, which is exactly the opposite. When buying, you expect the price of the currency pair to rise over time, for example, you buy cheap to sell at high prices; which is easy to understand. In the case of Short Selling, it seems a little more complicated. Here the way to make money is to initially sell a currency pair that you think will lose value over a given period of time and then, once that happens, you will buy it back at the new price but now you can resell it at the previous higher price the currency had when you had it. open the trade, then you earn the price difference. It may seem a little complicated when you get started, but once you are in front of your trading station it will feel a lot easier.