How to buy and sell currency

How to buy and sell currency

How to buy and sell currency

When it comes to buying and selling forex, traders have unique styles and approaches. This is because the forex market is one of the most liquid and largest in the world and as a result there is no one single way to trade.

Knowing when to buy and sell forex depends on many factors, but there tends to be more volume when markets are volatile because of the associated higher risk. This article will explore the concept of buying and selling currencies using practical examples as well as additional resources to boost your forex trading experience.

What it means to buy and sell forex

Buying and selling forex pairs involves estimating the appreciation/depreciation in value of one currency against the other. This could involve fundamental or technical analysis as a foundation of the trade. Once a basis has been formed, the trader will look to other technical and fundamental aspects. Key levels of entry and exit will follow, keeping in mind risk management processes.

Factors which affect currency pairs

How to buy and sell currency

Government instability, corruption and changes in government can affect the value of a currency – for example, when president Donald Trump was elected the Dollar soared in value!

From a fundamental standpoint , forex traders keep a close eye on unemployment figures, GDP, monetary and fiscal policies (just to name a few) which have influence over the value of currencies. Our economic calendar shows upcoming events which may shake up the financial markets.

Technical traders tend to favor key price levels ( support & resistance ), trends and other indicators to form a basis for their forex trades.

How to buy and sell EUR/USD

Using the EUR/USD currency pair, we will provide an example of how and when to buy or sell forex. Let’s say you want to buy the EUR/USD. If the EUR goes up in value relative to the USD once the trade is sold, you could have made a profit (depending on commission and other fees). A trader in this example would be buying the EUR and selling the USD at the same time. As an example, if the EUR/USD pair was bought at 11300 and the pair moved up to 11504 at the time that the trade was closed/exited, the profit on the trade would have been 204 pips . This is shown in the chart below.

How to buy and sell currency

In this example the technical perspective was utilized:

  • Entry level – Morning star candlestick pattern shows a potential entry point, which was substantiated by the use of the RSI indicator which displays an oversold signal.
  • Exit level – Using key price levels of to set initial take profit level.

Similarly, a fundamental trader could trade the USD/JPY currency pair by following political and economic news. For example, if a fundamental trader expected the Fed to hike interest rates , this may attract greater foreign investment into the US, and thus more demand for the home currency (USD). The trader could then look to enter into a long (buy) position in anticipation of the USD to appreciating in value. Of course, this is not absolutely certain as economic principals/theory do not always translate to real world conditions. Taking short positions on forex pairs is slightly more complex as opposed to buying. Read more on how to short forex to gain more insight.

Understanding risk management when buying and selling forex

Risk management is essential to longevity in forex trading. This does not simply include a positive risk/reward ratio but understanding the potential swings in volatility as well. Factors affecting forex pairs can have significant impacts at times so preventing adverse effects on your trade can be managed by implementing proper risk management techniques. Buying and selling forex can be complex, therefore understanding the mechanics behind it, such as h ow to r ead c urrency p airs , is essential prior to initiating a trade. We also recommend reading our forex guide for beginners to get a crash course on the basics of forex trading.

Foreign Currency Ordering—Convenient and Secure

How to buy and sell currency

How to buy and sell currency

How to buy and sell currency

How to buy and sell currency

How to buy and sell currency

We provide all-in pricing for exchange rates. The price provided may include profit, fees, costs, charges or other mark ups as determined by us in our sole discretion. The level of the fee or markup may differ for each customer and may differ for the same customer depending on the method or venue used for transaction execution.

In connection with our market making and other activities, we may engage in hedging, including pre-hedging, to mitigate our risk, facilitate customer transactions and hedge any associated exposure. Such activities may include trading ahead of order execution. These transactions will be designed to be reasonable in relation to the risks associated with the potential transaction with you. These transactions may affect the price of the underlying currency, and consequently, your cost or proceeds. You acknowledge that we bear no liability for these potential price movements. When our pre-hedging and hedging activity is completed at prices that are superior to the agreed upon execution price or benchmark, we will keep the positive difference as a profit in connection with the transactions. You will have no interest in any profits.

We also may take proprietary positions in certain currencies. You should assume we have an economic incentive to be a counterparty to any transaction with you. Again, you have no interest in any profit associated with this activity and those profits are solely for our account.

You acknowledge that the parties to these exchange rate transactions engaged in arm’s-length negotiations. You are a customer and these transactions do not establish a principal/agent relationship or any other relationship that may create a heightened duty for us.

We do not accept any liability for our exchange rates. Any and all liability for our exchange rates is disclaimed, including without limitation direct, indirect or consequential loss, and any liability if our exchange rates are different from rates offered or reported by third parties, or offered by us at a different time, at a different location, for a different transaction amount, or involving a different payment media (including but not limited to bank-notes, checks, wire transfers, etc.).

Order by 2 p.m. (delivery address local time) and your currency will ship the same business day. See shipping & fee details layer

Order foreign currency

We provide all-in pricing for exchange rates. The price provided may include profit, fees, costs, charges or other mark ups as determined by us in our sole discretion. The level of the fee or markup may differ for each customer and may differ for the same customer depending on the method or venue used for transaction execution.

In connection with our market making and other activities, we may engage in hedging, including pre-hedging, to mitigate our risk, facilitate customer transactions and hedge any associated exposure. Such activities may include trading ahead of order execution. These transactions will be designed to be reasonable in relation to the risks associated with the potential transaction with you. These transactions may affect the price of the underlying currency, and consequently, your cost or proceeds. You acknowledge that we bear no liability for these potential price movements. When our pre-hedging and hedging activity is completed at prices that are superior to the agreed upon execution price or benchmark, we will keep the positive difference as a profit in connection with the transactions. You will have no interest in any profits.

We also may take proprietary positions in certain currencies. You should assume we have an economic incentive to be a counterparty to any transaction with you. Again, you have no interest in any profit associated with this activity and those profits are solely for our account.

You acknowledge that the parties to these exchange rate transactions engaged in arm’s-length negotiations. You are a customer and these transactions do not establish a principal/agent relationship or any other relationship that may create a heightened duty for us.

We do not accept any liability for our exchange rates. Any and all liability for our exchange rates is disclaimed, including without limitation direct, indirect or consequential loss, and any liability if our exchange rates are different from rates offered or reported by third parties, or offered by us at a different time, at a different location, for a different transaction amount, or involving a different payment media (including but not limited to bank-notes, checks, wire transfers, etc.).

WazirX is a leading Indian cryptocurrency exchange that has been acquired by Binance in 2019. This exchange works on a peer-to-peer platform where you sell your cryptocurrencies, and the money is sent directly to your bank account. Currently, WazirX operates in India, Russia, Nigeria, Ukraine, Indonesia, Saudi Arabia, Turkestan, and the United Kingdom. Users can buy, sell, and trade various cryptocurrencies like Bitcoin, Ethereum, Litecoin, Stellar, Ripple using Indian rupees. In this article, we’ll understand how you can use WazirX to buy and sell cryptocurrencies.

How to Register and What is KYC?

If you want to register with India’s largest crypto exchange – WazirX, you have to fulfill a few requirements. Firstly, you should hold an ID card that has your valid address and photo. Secondly, you should have a bank account to receive and send payments. Registering on the platform is a simple process; you need to fill in details like the email address and your mobile number.

What is KYC, and How do you fill KYC in WazirX?

KYC(Know Your Customer) verification is information you need to submit for verifying your identity. You must fill the KYC if you want to buy or sell crypto on the WazirX platform. For KYC, you need to provide details like a government ID or use your driving license or passport and get it verified. After submitting the required documents, it might take up to 3 days to get verified and reviewed; once it is done, you can use WazirX.

How to Buy Cryptocurrencies on WazirX?

  • If you want to buy cryptocurrency through WazirX, you should, most importantly, have a bank account for an IMPS/NEFT transfer to buy crypto.
  • On the P2P tab, you need to choose a currency you want to buy. The buying and selling process is very straightforward.
  • In order to buy your preferred cryptocurrency, you must purchase USDT first.
  • You can select a currency from the list to buy or sell. Next, you should type out the amount you’d like to buy and click on the place buy order button.
  • After clicking the buy order button, WazirX will connect you to the seller who is selling USDT at your mentioned price. When the buyer is found, it will display the NEFT/ IMPS/online details so that you can directly pay the seller. After the payment is confirmed by the seller, your WazirX wallet will receive USDT.

How to Sell Cryptocurrencies on WazirX?

WazirX provides a peer-to-peer platform that allows you to sell cryptocurrencies directly to buyers, but only as USDT since it is stable, secure, and hassle-free. Here are a few steps to start selling cryptocurrencies through WazirX –

  • First, you should register on WazirX. If you wish to sell a cryptocurrency, you should have a bank account where the money will be deposited.
  • After registering on the WazirX platform and when you are verified and registered, you can sell the cryptocurrencies in USDT. The next step would be to click the p2p from the menu and select the currency.
  • At the bottom of the page, you need to select the USDT amount you would like to sell. You’ll be automatically connected to the buyers by the system, and when the buyer has paid, you should confirm with your bank. When the actual payment has been made, the USDT is released to the buyer.,

Why Should You Buy Cryptocurrencies from WazirX?

  • WazirX was acquired by Binance in 2019 November, the world’s largest and leading cryptocurrency exchange. After this acquisition, WazirX has become an international cryptocurrency exchange, which means that crypto traders and Bitcoin investors around the world can use WazirX’s P2P platform.
  • Wazir X provides optimum security, and it is a highly secure exchange.
  • WazirX’s infrastructure can execute millions of fiat-to-crypto, crypto-to-crypto, crypto-to-fiat transactions.

The Takeaway

WazirX is a cryptocurrency exchange where you can buy, sell, and trade with cryptocurrencies. It has become the most popular and leading cryptocurrency in India since its inception. It supports trading in more than 100 cryptocurrencies and uses a specialized peer-to-peer platform where buyers are connected to sellers directly, which eliminates the need for order books that are maintained in other P2P transactions. WazirX provides a powerful and seamless crypto trading experience and is one of the topmost reliable crypto platforms available on Windows, Android, and iOS.

The bid-ask spread (informally referred to as the buy-sell spread) is the difference between the price a dealer will buy and sell a currency. However, the spread, or the difference, between the bid and ask price for a currency in the retail market can be large, and may also vary significantly from one dealer to the next.

Understanding how exchange rates are calculated is the first step to understanding the impact of wide spreads in the foreign exchange market. In addition, it is always in your best interest to research the best exchange rate.

Key Takeaways

  • The bid-ask spread (or the buy-sell spread) is the difference between the amount a dealer is willing to sell a currency for versus how much they will buy it for.
  • Exchange rates vary by dealer, so it’s important to research the best rate before exchanging any currency.

Bid-Ask Spreads in the Retail Forex Market

The bid price is what the dealer is willing to pay for a currency, while the ask price is the rate at which a dealer will sell the same currency.

For example, Ellen is an American traveler visiting Europe. The cost of purchasing euros at the airport is as follows:

  • EUR 1 = USD 1.30 / USD 1.40

The higher price (USD 1.40) is the cost to buy each euro. Ellen wants to buy EUR 5,000, so she would have to pay the dealer USD 7,000.

Suppose also that the next traveler in line has just returned from her European vacation and wants to sell the euros that she has left over. Katelyn has EUR 5,000 to sell. She can sell the euros at the bid price of USD 1.30 (the lower price) and would receive USD 6,500 in exchange for her euros.

Because of the bid-ask spread, the kiosk dealer is able to make a profit of USD 500 from this transaction (the difference between USD 7,000 and USD 6,500).

When faced with a standard bid and ask price for a currency, the higher price is what you would pay to buy the currency and the lower price is what you would receive if you were to sell the currency.

Direct and Indirect Currency Quotes in Forex Markets

A direct currency quote, also known as a “price quotation,” is one that expresses the price of a unit of foreign currency in terms of the domestic currency. An indirect currency quote, also known as a “volume quotation,” is the opposite of a direct quote. An indirect currency quote expresses the amount of foreign currency per unit of domestic currency.

Most currencies are quoted in direct quote form (for example, USD/JPY, which refers to the amount of Japanese yen per one U.S. dollar). The currency to the left of the slash is called the base currency and the currency to the right of the slash is called, the counter currency, or quoted currency.

Commonwealth Currencies

Commonwealth currencies such as the British pound and Australian dollar, as well as the euro, are generally quoted in indirect form (for example, GBP/USD and EUR/USD, which refer to the amount of US dollars per one British pound and per one euro).

Consider the Canadian dollar. In Canada, this quotation would take the form of USD 1 = CAD 1.0750. This represents a direct quotation, since it expresses the amount of domestic currency (CAD) per unit of the foreign currency (USD). The indirect form would be the reciprocal of the direct quote, or CAD 1 = USD 0.9302.

Next, consider the British pound. In the United Kingdom, this quotation would take the form of GBP 1= USD 1.700. This represents an indirect quotation since it expresses the amount of foreign currency (USD) per unit of domestic currency (GBP). The direct form of this quote would be USD 1 = GBP 0.5882.

Understanding How Currencies are Quoted

When dealing with currency exchange rates, it’s important to have an understanding of how currencies are quoted.

Suppose there is a Canadian resident who is traveling to Europe and needs euros. The exchange rates in the forex market are approximately USD 1 = CAD 1.0750, and EUR 1 = USD 1.3400. That means the approximate EUR/CAD spot rate would be EUR 1 = CAD 1.4405 (1.3400 x 1.0750). A currency dealer in Canada might quote a rate of EUR 1 = CAD 1.4000 / 1.4800, which means that you would pay 1.48 Canadian dollars to buy one euro and would receive 1.40 Canadian dollars if you sold one euro.

The calculation would be different if both currencies were quoted in direct form. If the approximate spot rate for the Japanese yen is USD 1 = JPY 102, this is how you would calculate the price of yen in Canadian dollars:

  • USD 1 = CAD 1.0750 and USD 1 = JPY 102
  • CAD 1.0750 = JPY 102, or CAD 1 = JPY 94.88 (102 / 1.0750)

In general, dealers in most countries will display exchange rates in direct form, or the amount of domestic currency required to buy one unit of a foreign currency.

How to Calculate Cross-Currency Rates

When dealing with cross currencies, first establish whether the two currencies in the transaction are generally quoted in direct form or indirect form. If both currencies are quoted in direct form, the approximate cross-currency rate would be calculated by dividing “Currency A” by “Currency B.”

If one currency is quoted in direct form and the other in indirect form, the approximate cross-currency rate would be “Currency A” multiplied by “Currency B.”

When you calculate a currency rate, you can also establish the spread, or the difference between the bid and ask price for a currency. More importantly, you can determine how large the spread is. If you decide to make the transaction, you can shop around for the best rate.

Exchange Rates Vary by Dealer

Rates can vary between dealers in the same city. Spending a few minutes online comparing the various exchange rates can potentially save you 0.5% or 1%.

Airport kiosks have the worst exchange rates, with extremely wide bid-ask spreads. It’s possible to receive 5% less of the currency you are buying. It may be preferable to carry a small amount of foreign currency for your immediate needs and exchange bigger amounts at banks or dealers in the city.

Some dealers will automatically improve the posted rate for larger amounts, but others may not do so unless you specifically request a rate improvement. If you haven’t had the time to shop around for the best rates, research ahead of time so you have an idea of the spot exchange rate and understand the spread. If the spread is too wide, consider taking your business to another dealer.

The Bottom Line

Wide spreads are the bane of the retail currency exchange market. However, you can mitigate the impact of these wide spreads by researching the best rates, foregoing airport currency kiosks and asking for better rates for larger amounts.

How to buy and sell currency

Buying, Selling, and Even Creating NFTs

To buy a NFT, send ETH to a web3 wallet like MetaMask. Then, connect your wallet to the NFT’s website, or a marketplace like Nifty, OpenSea, or Rarible. Next, buy or bid on the NFT you want. You might win a bid, but a buy will go through right away.

To sell a NFT, put it up for auction at OpenSea or another marketplace (people can bid on your NFT, or you can define a price to sell at).

To create a NFT, create an OpenSea (or another marketplace) account, upload your work, choose your starting bid and adjust other parameters like commission, and create the listing (it is free on OpenSea, but you may need to pay ETH as gas here).

For the most part, it is as simple as that. You’ll need ETH for most actions, so go buy that before you do anything (unless you only plan to create NFTs). Then ETH goes into MetaMask. Lastly, ETH is used to buy NFTs, bid on NFTs, and/or pay gas fees. NFTs you own are stored in your MetaMask wallet and you can see it by going to EtherScan and putting in your ETH address.

All the rest of the steps like securing your wallet, creating an OpenSea account, bidding, put your NFT up for auction later, and even something like adjusting gas or confirming a transaction are just sort of details along the way.

Okay though, now that you have the gist down, let’s talk details.

WHAT IS A NFT? An NFT is a token (typically an Ethereum-based token) that is unique and non-divisible. Ether (ETH) is a tokenized currency on the Ethereum network, other tokens like this are called ERC-20s. NFTs are unique tokens on the Ethereum network that can be used as things like collectibles, these use standards like ERC-1155 and ERC-721. There are other token types as well. All ETH currency tokens are the same and have the same value and are divisible, they are “fungible.” All NFTs are unique, they are non-fungible, they are not divisible. NFT stands for Non Funigble Token. Simple as that. Because of the way NFTs work, they are useful for unique items like collectibles, art, and music, but you can use them for other things like insurance contracts. This is different than ETH, which works more like money than a collectible.

TIP: If you put off buying ETH until you are ready to buy an NFT, you will be waiting a while to buy the NFT. It takes a good 5 days minimum for Coinbase transactions to clear. So buy ETH and move it into MetaMask well before you are ready to buy your NFT.

MetaMask and Other Web3 Wallets

MetaMask is an Ethereum wallet and browser extension that lets you interact with “dApps,” AKA a Web3 wallet. This is just a fancy way of saying you can interact with websites that act as Etehreum platforms like EtherCards, OpenSea, NodeRunners, Rarible, Nifty, etc and transact with them if you have ETH. Uniswap is also a dApp for perspective.

Are there other web3 wallets? Sure yeah, Coinbase Wallet is one example (not to be confused with the ETH wallet in your Coinbase account), but let’s keep it simple and use MetaMask. Learn more about MetaMask.

NFT Presales and dApps

Often someone who wants to buy their first NFT will be buying on a specific NFT projects platform, potentially during a presale.

Here what you will do is wait for the presale to start, then go to the buy page (typically the front page) and then:

  1. Hit the ‘connect your wallet’ (or similarly named) button.
  2. Input the amount you want, or select what you want, and hit the buy button.
  3. Adjust your gas using the advanced selector in MetaMask if necessary (as presales tend to require very high gas to get in early).

TIP: Presales with bonding curves, where the price goes up the more that are sold, typically will require aggressive gas settings to lock in early prices.

TIP: In MetaMask you can adjust the max gas you will pay. Keep an eye on the current ETH gas price to get a sense of what fast gas is at the moment.

Using Rarible, OpenSea, and Other NFT Platforms

Here is the reality, if you have ETH on MetaMask and know that you simply go to OpenSea or Rariable and hit connect to start using the platform, there isn’t much I can tell you that the on-site instructions can’t. That said, I’ll give you the gist.

Let’s use OpenSea as an example.

OpenSea is an auctioning platform for NFTs and an NFT creation platform. You can bid on NFTs, you can buy NFTs, you can put an NFT up for auction so other people can bid on it, and you can sell NFTs. That means you can buy NFTs, make NFTs (image, audio, GIF, or 3D model.), or you can sell a NFT you own. If you want to make one, you can define parameters like the commission you get when your NFT is bought and sold and the price. You can also accept offers other people make on your NFT.

You’ll need to create a profile before you start buying or selling, so do that first by clicking the icon in the top right corner of the screen. Your profile will be attached to your ETH address.

From there you are either going to ‘create’ a NFT, find an NFT you like and hit ‘buy’, bid on an NFT and hope your offer is accepted, or put an NFT up for sale by selecting ‘add an existing contract’ under the ‘create’ screen.

IMPORTANT: If you want to make sure a NFT is legit, look for a blue check mark. CryptoKitties with a check market are real CryptoKitties for example. Also, some NFTs have warnings that should be heeded. For example, “Hashmask names can change at any time. Immediately before purchasing a Hashmask, enter the Hashmask’s token ID into the tokenNameByIndex function on a site like Etherscan to verify that the blockchain indicates that the Hashmask you’re purchasing has the name you expect.”

USING WETH: On some platforms, like OpenSea, you’ll use WETH to bid. That is wrapped ETH. This lets you bid on multiple NFTs at once. You can convert to WETH using OpenSea, or you can swap to WETH via an app like UniSwap. It is the same deal for a platform with a native token, you can typically swap on-platform or go to UniSwap or SushiSwap to get the token first.

How to Buy and Sell NFTs” contains information about the following Cryptocurrencies:

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Gordon Scott has been an active investor and technical analyst of securities, futures, forex, and penny stocks for 20+ years. He is a member of the Investopedia Financial Review Board and the co-author of Investing to Win. Gordon is a Chartered Market Technician (CMT). He is also a member of ASTD, ISPI, STC, and MTA.

Trading in any investment market is very difficult as evidenced by the fact that most beginning traders lose money. However, success can be found with enough of the right education, practice, and experience. So, what is currency trading and is it right for you?

The currency market, or forex (FX), is the largest investment market in the world and continues to grow annually. On April 2010, the forex market reached $4 trillion in daily average turnover, an increase of 20% since 2007.  

In comparison, there is only $25 billion of daily volume on the New York Stock Exchange (NYSE). The market may be large, but until recently the volume came from professional traders, but as currency trading platforms have improved more retail traders have found forex to be suitable for their investment goals.

Key Takeaways

  • Forex exchanges allow for 24/7 trading in currency pairs, making it the world’s largest and most liquid asset market.
  • While it is the largest market in the world, a relatively small number (

20) of currency pairs are responsible for the majority of volume and activity.

  • Currencies are traded against one another as pairs (e.g., EUR/USD) and each pair is typically quoted in pips (percentage in points) out to four decimal places.
  • Currency prices fluctuate based on the economic situation of the countries involved, geopolitical risk and instability, and trade & financial flows, among other factors.
  • How Does it Work?

    Currency trading is a 24-hour market that is only closed from Friday evening to Sunday evening, but the 24-hour trading sessions are misleading. There are three sessions that include the European, Asian and United States trading sessions.

    Although there is some overlap in the sessions, the main currencies in each market are traded mostly during those market hours. This means that certain currency pairs will have more volume during certain sessions. Traders who stay with pairs based on the dollar will find the most volume in the U.S. trading session.

    Top 5 Questions About Currency Trading Answered

    Pairs and Pips

    All currency trading is done in pairs. Unlike the stock market, where you can buy or sell a single stock, you have to buy one currency and sell another currency in the forex market. Next, nearly all currencies are priced out to the fourth decimal point. A pip or percentage in point is the smallest increment of trade. One pip typically equals 1/100 of 1%.

    Currency is traded in various sized lots. The micro-lot is 1,000 units of a currency. If your account is funded in U.S. dollars, a micro lot represents $1,000 of your base currency, the dollar. A mini lot is 10,000 units of your base currency and a standard lot is 100,000 units.

    A pip (percentage in point) is the smallest increment of trade. One pip typically equals 1/100 of 1%, or the number in the fourth decimal point. Most currencies are priced out to the fourth or fifth decimal point. Exceptions to this rule are currency pairs that include the Japanese Yen (JPY) as the quote currency. These pairs typically price out to two or three decimal places, with a pip being represented by the second decimal place.

    Retail or beginning traders often trade currency in micro lots, because one pip in a micro lot represents only a 10-cent move in the price. This makes losses easier to manage if a trade doesn’t produce the intended results. In a mini lot, one pip equals $1 and that same one pip in a standard lot equals $10. Some currencies move as much as 100 pips or more in a single trading session making the potential losses to the small investor much more manageable by trading in micro or mini lots.

    Far Fewer Products

    The majority of the volume in currency trading is confined to only 18 currency pairs compared to the thousands of stocks that are available in the global equity markets. Although there are other traded pairs outside of the 18, the eight currencies most often traded are the U.S. dollar (USD), Canadian dollar (CAD), euro (EUR), British pound (GBP), Swiss franc (CHF), New Zealand dollar (NZD), Australian dollar (AUD) and the Japanese yen (JPY). Although nobody would say that currency trading is easy, having far fewer trading options makes trade and portfolio management an easier task.

    What Moves Currencies?

    An increasing amount of stock traders are taking interest in the currency markets because many of the forces that move the stock market also move the currency market. One of the largest is supply and demand. When the world needs more dollars, the value of the dollar increases and when there are too many circulating, the price drops.

    Other factors like interest rates, new economic data from the largest countries and geopolitical tensions, are just a few of the events that may affect currency prices.

    The Bottom Line

    Much like anything in the investing market, learning about currency trading is easy but finding the winning trading strategies takes a lot of practice. Most forex brokers will allow you to open a free virtual account that allows you to trade with virtual money until you find strategies that will help you become a successful forex trader.

    If you are an aspiring currency trader, then your success will depend upon how well you buy and sell forex pairs. Whether attempting to “buy low and sell high” or “sell high and buy low” engaging the market with maximum efficiency is the key to achieving long-term success. In this entry, we will cover a few fundamental forex buy and sell tips , along with actual strategies for buying and selling currency products.

    How to buy and sell currency

    Which Currencies Can You Buy, Sell, and Trade On The Forex?

    Perhaps one of the most significant benefits of forex trading is the multitude of options available to market participants. Currencies from every corner of the globe are readily tradable, each with a unique collection of opportunities and risks. Make no mistake, when it comes to buying and selling currency , the forex is the world’s premier destination.

    The currencies available to buy, sell, and trade on the forex are grouped according to three primary classifications:

    • Majors: The majors are the eight largest and most frequently traded currencies in the world. These include the U.S. dollar (USD), euro (EUR), British pound sterling (GBP), Swiss franc (CHF), Canadian dollar (CAD), Japanese yen (JPY), Australian dollar (AUD), and New Zealand dollar (NZD).
    • Minors: Minor currencies are those that are bought and sold less frequently than the majors. According to the Bank of International Settlements (BIS) Triennial Survey 2019, examples of minors include the Hong Kong dollar (HKD), Norwegian krone (NOK), South Korean won (KRW), and Swedish krona (SEK).
    • Exotics: Exotic currencies are sparsely traded and offer greater volatility than the majors and minors. Typically, exotics are monies local to developing nations and are less stable than those of more established economies. The BIS Triennial Survey 2019 suggests that the Malaysian Ringgit (MYR), South African rand (ZAR), and Romanian Leu (RON) may be classified as exotic currencies.

    On the forex, currencies are traded in tandem with one another, or “paired.” Subsequently, currency pairings furnish market participants with a convenient way to directly capitalize on international exchange rate variations . One is able to quickly buy and sell forex pairs as deemed fit, according to any strategy. Below are a few of the most popular forex currency pairs:

    • Majors: The majors feature the largest traded volumes on the forex and are paired with the world’s reserve currency the USD. The major pairs are the EUR/USD, GBP/USD, USD/CHF, USD/CAD, USD/JPY, AUD/USD, and the NZD/USD.
    • Minors: Minor pairs are those that do not include the USD. Some of the most popular are the EUR/GBP, EUR/AUD, CHF/JPY, and GBP/CAD. Minor pairs are often referred to as “crosses,” as the USD is absent from the exchange.
    • Exotics: Exotics are less commonly traded, featuring comprehensive bid/ask spreads and enhanced volatility. Examples include the USD/HKD, JPY/NOK, and GBP/ZAR.

    One of the great things about forex is the actual size of the marketplace. With more than $6 trillion in average daily turnover (2019), there are always opportunities to profit from buying and selling currency pairs. Through a little due diligence, it’s possible to focus on the currency or currencies best-suited to your personal goals.

    Factors That Impact Currency Pairs

    At the top of any list of forex buy and sell tips is choosing an ideal currency or pairing to trade. Of course, finding the best pair will depend upon your resources, expertise, and strategic objectives. Optimal forex pairs exhibit the following characteristics:

    • Liquidity: The best currency pairs are consistently liquid. Robust participation facilitates tight bid/ask spreads, reduced slippage, and overall trade-related efficiency. These are key factors to be aware of before you buy and sell forex pairs.
    • Volatility:Exchange rate volatility measures the magnitude of pricing fluctuations displayed by a currency pair. Volatility enhances both risk and reward, as extreme swings in pricing can produce extraordinary gains and losses. While volatility is viewed by many traders as being a negative, exchange rate fluctuations are needed to profit from buying and selling currency pairs.

    If you are going to make money through buying and selling currency pairings on the forex, it’s best to focus on those that are liquid and active. These products offer tight bid/ask spreads, optimal market depth and an abundance of money-making opportunities.

    How to buy and sell currency

    When To Buy And Sell Currencies On The Forex

    If you have any experience in the business world, then you already know that timing is everything. Forex trading is no different ― one must buy, sell, and trade forex pairs at the right time to sustain profitability.

    So, how can one decide when to buy and sell forex pairs? That answer is complex and will vary depending upon your trading strategy. Nonetheless, there are various tried-and-true methods of timing the market properly. Below are the three primary types of trading and a few forex buy and sell tips :

    • Trend: Trend traders buy and sell forex pairs in concert with a directional move in exchange rates. To accomplish this task, traders use tools such as Fibonacci retracements , moving averages, and momentum oscillators to decide when to join a prevailing trend. If the indicators are deemed valid, the trader buys to enter a bullish trend and sells to enter a bearish trend.
    • Reversal: In contrast to trend following strategies, reversals involve identifying a market’s periodic top or bottom. To identify a potential market entry point, technical indicators are frequently used to buy, sell and trade reversals. A few examples are Stochastics , candlestick patterns , and moving average crossovers. Upon a currency pair becoming “overbought” or “oversold,” a reversal trade is then executed. This is done through buying against a bearish trend and selling against a bullish one. Although many forex buy and sell tips to promote reversal strategies, it’s important to remember that they can be tricky to execute and are at higher risk.
    • Range: A range-bound market is one that is trading within an established periodic upper and lower extremity. These types of markets are often considered to be boring due to the lack of a prevailing trend. However, many traders prosper through focussing on range-bound markets. One common way is through implementing reversion-to-the-mean strategies. When adhering to a reversion-to-the-mean methodology, buying and selling currency pairs is done contrary to an established top or bottom. If successful, selling near a market’s top or buying near the bottom will be profitable as price rejects the extreme and revisits an average level.

    Ultimately, each of the above strategy types can be effective ways of determining when to buy and sell forex pairs. Given a consistent application and disciplined approach, it’s possible to realize steady gains from trading trends, reversals, and range bound markets.

    How to buy and sell currency

    A major concern of a new Forex trader is: “How can to make a profitable decision regarding buying or selling a currency pair? Or when is the right time to buy or sell a certain currency pair? What are some profitable forex trading tips for different currency pairs?”You can decide by a fundamental trading analysis.

    Fundamental Trading Analysis:

    Fundamental trading analysis views and observes the economy of the country whose currency attracts the attention of the trader. The analysis revolves around the major elements of the economy such as exports, imports, productivity, interest rate etc. This analysis helps to grasp an idea of the future stability of the currency of that country as every currency reflects and demonstrates the economic condition of its country. This analysis gives you some beneficial forex trading tips.

    How to buy and sell currency

    Example:

    You are trading this currency pair:

    Here EUR is the base currency as it is the basis of a trade.

    SELL EUR/USD:

    If you believe that the economy of U.S.A is progressing and the value of its currency is going to rise against euro, then you will opt to sell euros and decide in the favour of placing a SELL EUR/USD order.

    How to buy and sell currency

    BUY EUR/USD:

    If you believe that the value of dollars is going to decrease as it economy is not stable or it is facing some crisis then you will decide to execute BUY EUR/USD order and buy euros to get rid of any avoidable loss.

    In Forex, trade is mostly done in “Lots” as you don’t do trade of just 1 or 2 euros or any other currency. Trading in lots is one of the effective forex trading tips. Usually traders prefer lots of 1000 units, 10000 units or 100000 units. 1000 units is a micro lot.10000 units is a mini lot. A standard lot is 100000 units. However it may differ from trader to trader as it depends upon your trading account and your broker.