Forex trading is known also as currency trading or foreign exchange;
it is regarded as one of the most famous traded markets all over the world . Forex trading depends on speculating on the value of the currency comparing to another, within this process the traders hope to make a profit.
This means, the value of the currency does not face any change unless it is compared to another currency, it is the reason why the
currencies usually traded in pairs.
Forex trading are more alike any other speculation, the trader purchase a currency at a low price, and sell it at higher price, by this process the trader make a profit. Like some other exchanging value, the spread for a Forex combine comprises of an offer cost at which you can offer (the lower end of the spread) and an offer cost at which you can purchase (the higher end of the spread). It is critical to note, be that as it may, for each Forex combine, which path round you are exchanging.
When purchasing, the spread dependably mirrors the cost for purchasing the main money of the Forex combine with the second. So an offer cost of 1.3000 for EUR/USD implies that it will cost you $1.30 to purchase €1. You would purchase on the off chance you feel that the cost of the euro against the dollar will raise, that is, whether you figure you will later have the capacity to offer your €1 for more than $1.30. When offering, the spread gives you the cost for offering the main cash for the second,so an offer cost of 1.3000 for EUR/USD implies that you can offer €1 for $1.30.
You would offer in the event you
believe that the cost of the euro will fall against the dollar, so you can
purchase back your €1 for not exactly the $1.30 you initially paid for it