How do forex trading works
The single most important thing on the FOREX market is the exchange rate between two currencies a currency pair. In general, the currency how do forex trading works rates reflect the health of countries' economies. You decide to buy 1 euros against US dollars. If you look at the FOREX quotes on your trading platform you will see that there are 2 how do forex trading works for each currency pair. One is the price at which you can buy, referred to as the "ask how do forex trading works, and the other is the price at which you can sell, referred to as the "bid price".
The difference between those two prices is known as the spread. The ask price is always higher than the bid price. With this leverage you can take a position with times larger value, resulting in times bigger profits or losses, therefore great care is required when placing your trade.
Equities on the other hand are traded without leverage. Then pick a currency pair e. Now you are a trader in a market used by millions of people all around the globe. Check out your current profit or loss in the Open positions window.
You can keep this position as long as you like. And when you no longer wish to keep your position, just close your trade by pressing the X button in the Open Positions window. This is called long position. The short trading enables you to take advantage how do forex trading works the exchange rate is going down. Investments can fall and rise. You may get back less than you invest. CFDs are higher risk because of leverage. Be sure you understand the risks.