“Forex sells buy market” is a caption that describes the market. It may sound too simple to be true but buying and selling are all that ever takes place in the market. What exactly does it mean to buy and sell currencies in the market?
SELLING AND BUYING IN THE MARKET
The market is there for traders currencies. Sometimes I wonder, “Why do I need to buy money with money?” To understand the answer to this question, you need to think of money, not from one point of view, but two. Think of money as a legal tender (a coin or bank note that must be accepted when offered in payment for a debt), and as a commodity (a basic good that is exchangeable with other commodities of the same type). From these two perspectives, it is easier to understand the possibility of buying and selling foreign currencies.
Just like in every other market, the reason for buying and selling foreign currencies is to make a profit. If you buy a currency, she does so in hopes that the value of the currency would increase, after which she can sell it to make profits. If you sell a currency, she does so expect the value of the currency to decrease after which she can buy it back and make some profits.
HOW TO BUY AND SELL FOREIGN CURRENCIES
Before you can buy and sell in the market, you are expected to have a basic knowledge of what the market is all about. Fx is all about buying and selling foreign currencies, but you will be surprised at the complexity therein, it is not a straight jacket kind of buying and selling. All there is to fx can be learnt in the process of research before going into the trade. After the research proper, the next thing to do is apply the knowledge acquired in the process of researching. First, register with a reputable broker, try demo trading for a while, and then proceed to real trading in due time. With basic knowledge and a broker, you are all set to trade in the market.
In trade, you might be buying currencies as well as selling, but there is no such thing as a physical exchange between the traders. Every procedure is done electronically with the internet connection, and with no respect to a person’s geographic location.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.