The functioning and the basic vocabulary
When we invest(surround) on the market of Forex, we speculate on the evolution of a currency(slogan). The currencies(slogans) are always esteemed by pairs. Their price(prize) displays generally with an integer followed by 4 decimals:
Example: EUR / USD = 1, 2545 (1 euro is worth 1,2545 dollars)
Here, when we buy of the EUR / USD, we bet on the increase of the Euro with regard to the Dollar. In other words we plan that the European economy will have better health than the American economy.
If we wish to bet on the decline of the Euro, it is enough to sell of the EUR / USD. It is indeed possible to sell a currency(slogan) which we do not possess. The mechanism under jacent is rather complex, but in the practice it means simply that you click "sale" instead of "purchase", and that you win if the pair of currencies(slogans) falls.
The variations of the pairs of currencies(slogans) are generally expressed " pips " there. When the EUR / USD passes from 1,2545 to 1,2565, one