When you buy or sell on the spot market the deals are completed immediately so it is the base for all other operations. They use the so called “benchmark price”. Although they are instant deals their settlement is processed on the second business day after the inquiry which gives the opportunities the involved institutions to do the necessary clearing operations.
These spot deals are the ABC of forex trading. Most simply said you have to choose the best moment to buy a currency pair (the cheapest the best) and then choose the best time to sell it (when the price is bigger). It is not that easy, indeed, and if you get the wrong timing you can put yourself in a dangerous situation when you currency pair start to devaluate. Then you have the choice to sell it in order to reduce the loose (damage control) or to wait until it gets higher values again.
Dealing on the spot market is the most common forex trading and it has certainly its secrets.
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