Currency and FOREX
Currency is the most common thing in daily life.
It can be used to buy goods and services.
when we go abroad, we should do the forex exchange.
1pound can exchange 1. 2937 US dollars, we can see this indirect quotation as GBPUSD 1.2937.
Exchange between different currencies called the exchange rate. Exchange rate is not a constant number. It Influenced by the political and economic environment of the country. The fluctuation of exchange rate, which gives investors the space to invest and trade.
In forex trading GBPUSD 1.2937, which means 1 pound is valued at $1.2937.
If you expect the value of the pound to fall against the dollar, you would sell the currency pair at $1.2937, then you bought currency pair after the rate went to 1.2927, you would have made 10 pips.
In forex, the trade object is a currency.
when you go long, you profit when the value rises;
when you go short, you profit when the value falls.