The mechanics of trading are virtually identical with those in other markets. The only difference is that you are buying one currency and selling another at the same time. Therefore, currencies are traded in pairs, like EUR / USD or USD / JPY. The exchange rate corresponds to the purchase price between the two currencies.
For example, the EUR / USD rate represents the number of USD can buy per EUR.
If you think you increase the euro value against the U.S. dollar, you buy Euros with U.S. dollars. If the exchange rate rises, you sell back the euro, and your profits in cash. Please note that Forex trading involves a high risk of loss.
Important: Be aware of the risks
Finally, it can not be stressed enough that foreign exchange on margin carries a high risk, and may not be suitable for everyone. Before deciding to trade foreign exchange you should carefully consider your investment objectives, experience and risk appetite. Remember, you could make a loss of some or all of the initial investment, which means you do not invest money that you can not afford to lose. If you have any doubts, we recommend that you seek advice from an independent financial adviser.
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