Think of a Currency Pair Like A See Saw

‘How To Trade Foreign Currency‘ is a common question asked online and one I get asked all the time, so I thought why not answer that specific question.  In order to understand how to trade foreign currencies, it is important to know that a currency’s value is always relative to another currency, such as the GBP vs the USD giving the currency pair, the GBPUSD.  Once you have selected a currency pair, then you are ether buying it, selling it or doing nothing.  If you Buy the GBPUSD currency pair, then it is because you think the GBP will strengthen in value against the USD, over time.  Similarly, if you sell the GBPUSD it is because you think the GBP will weaken against the USD, or the USD will strengthen in value compared to the GBP, over time.  Once you understand this concept then there are several ways to trade Foreign Currency: Continue reading →