Forex

Four x currency trading

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You sell your currency to buy another one. Every traveler who has gotten foreign currency has done forex trading. For example, when you go on vacation to Europe, you exchange dollars for euros at the going rate. The most familiar type of forex trading is spot trading. It’s a simple purchase of one currency using another currency. You usually receive the foreign currency immediately.

It’s similar to exchanging currency for a trip. It’s a contract between the trader and the market maker, or dealer. The trader buys a particular currency at the buy price from the market maker and sells a different currency at the selling price. The buy price is somewhat higher than the selling price. You paid this spread without realizing it when you exchanged your dollars for euros. You would notice it if you made the transaction, canceled your trip and then tried to exchange the euros back to dollars right away.