How good are you as a trader?Question & Answers
Forex trading is the practice of buying and selling currencies for the purposes of speculation, hedging or any other needs. Unlike stocks and commodities, Forex trading is always relative. When you buy a currency, you sell another one relative to it. You can't just buy dollars. You have to buy them for another currency (unless you buy $10 for $10). The agreement is that first we write the base currency (one unit of currency), followed by the price currency (the price of the base currency), therefore, if EURUSD is trading at 1.2000 today, it means that 1 euro will bring you 1.20 dollars. In other words, $1.20 is worth 1 euro. Naturally, this means that the euro is stronger than the US dollar, because you need more than $1 to get 1 euro.