Forex Signals

Understanding Forex Orders

One thing that you must understand about orders is that when you buy or sell short, you are simply exchanging 1 currency for another. For instance, consider the Euro/dollar currency pair, which is expressed as EUR/USD. (Short tutorial: Currency Quotes) EUR is the base currency and USD is the quote currency. Since this is the most actively traded currency pair, most brokers allow you to trade it. When you buy EUR/USD, you are exchanging Euros for United States dollars, and when you sell this pair, you are doing the opposite—exchanging dollars for Euros. Note that buying EUR/USD is the same as selling USD/EUR, and vice versa. (You do not have to worry about having Euros in your account to buy dollars—the broker will take care of this for you automatically.)

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