In this section of our forex trading PDF, we'll talk about the different ways you can sell and buy a forex position, as well as things to watch out for.

Prices and Offers

When it comes to forex trading, you will see both bid and ask prices:

•     Bit price: this is the price at which you can sell currency.
•     Ask price: This is the price at which you can buy currency.

When it comes to currency trading, you can make both short and long trades. However, always make sure that you have a good understanding of forex trading before you start trading. After all, forex trading can be a bit complex at first, especially when mixing long and short trades.

Long Trade (Buy)

In short, long positions are usually used for buying in https://exnesslatam.com/social-trading/. So when traders expect the price of an asset to rise, they will go long.

As an example of a long position:

•     Suppose you have held a long position in the primary instrument you bought
•     For example, USD / JPY
•     This means that you expect the USD to increase in value against the JPY
•     If you invest 1,000 GBP in USD / JPY through a long position, you simply put in 1,000 GBP for the pair to gain value

Short Trade (Sell)

When Forex traders expect the price of an asset to fall, they become short. This means profiting from buying at a lower value. To achieve this, all you need to do is place a sell order.

Current prices and demand

The current exchange rate of a Forex pair is always based on market forces. This will change from second to second. As mentioned earlier, you also need to take into account the spread so prices will always vary slightly.

For example, if you exchange 1 USD for 17 ZAR, the selling and buying price offered by your Forex broker will be on either side of this number. The currency pairs with the most remarkable supply and demand are considered the most liquid in the forex market. The supply and demand aspect is due to the investments of importers, exporters, banks and traders to name a few. In this way, buy and sell positions worth over $5 trillion are offered in the forex arena every day!

Therefore, the most liquid currency pairs are the most in demand. For example, GBP / USD offers many pips moved every day (90-120 on average) due to the amount of short-term trading opportunities. On the contrary, AUD / NZD does not tend to move many pips in a day. However, if you have a good understanding of some of the more exotic currencies, we at Learn 2 Trade do not say that it is impossible to achieve good results.