How does Forex trading work?
Currency traders generate profits or losses based on whether a currency is rising or falling by
buying one currency, which is anticipated to gain value against another currency or selling one
currency, which is anticipated to lose value against another currency.
When trading currencies, a position is opened at the current rate and can then be closed any time
afterwards, at that next moment’s rate. Positions that are not closed within two business days are
automatically “rolled over”, meaning the Forex dealer who is retaining the position will keep
automatically renewing your spot contract for you until it is closed.
A Forex market price of a currency pair is identified by two symbols, Ask and Bid, which have
specific functions.
Ask price is the higher value in the pair’s quotation at which a trader buys the currency, standing
first in the abbreviation of the currency pair. The trader sells the currency standing second.
Bid price is the lower price in the quote of the currency pair, at which a trader sells the currency
standing first in the abbreviation of the currency pair. A trader buys the currency standing second.
