How to Buying For Forex

Posted by admin on April 9, 2010 under How To Forex | Be the First to Comment

Buying For Forex

Buying a currency pair implies buying (longing) the first (base) currency and selling (shorting) an equivalent amount of the second (quote) currency to pay for the base currency. For example, buying EUR/USD means that you are buying Euros (EUR) using US Dollars (USD).
It is not necessary for the trader to own the quoted currency prior to selling, as it is sold short. A speculator buys a currency pair if she believes the forex rate for the base currency will go up relative to that for the quote currency (that is, the value of the pair will go up).

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