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Forex explained in simple terms

forex explained in simple terms

in another currency. In this case you are right and the spread for EUR/GBP falls.8312-0.8313. Part 5: What is Fundamental Analysis? Margin can be either free or used. If a traders account falls below the minimum amount required to maintain an open position, he will receive a margin call requiring him to either add more money into his or her account or to close the open position. If you think the price of the euro is going to rise against the pound you would buy euros at the offer price.8415 per euro. Find out more about spread betting. So a bid price.3000 for EUR/USD means that you can sell 1 for.30. If you were to buy the eurusd and the euro strengthened against the dollar, you would then be in a profitable trade. If you buy the EUR/USD (or any other currency pair the exchange rate tells you how much you need to pay in terms of the" currency to buy one unit of the base currency. Just like any other form of speculation, you want to buy a currency at one price and sell it at higher price (or sell a currency at one price and buy it at a lower price) in order to make a profit.

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If you open one standard lot of EUR/USD for 150,000 (100,000 x eurusd.5000) your leverage ratio is 15:1 (150,000 / 10,000). You would buy if you think that the price of the euro against the dollar is going to rise, that is, if you think you will later be able to sell your 1 for more than.30. Instead you put down a margin deposit, which is a fraction of the full value. Suppose the spread for EUR/GBP.8414-0.8415. Currencies are grouped into pairs to show the exchange rate between the two currencies; in other words, the price of the first currency in the second currency. This allows a trader to leverage his account by up to 100 times or a leverage ratio of 100:1. This phrase is also sometimes used to refer to currency"s which do not involve the.S. Part 1: Introduction What Is Forex Trading? Heres an example of a Forex" for the euro. Bid and Ask price, bid Price, the bid is the price at which the market (or your broker) will buy a specific currency pair from you.

forex explained in simple terms