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What happens when I BUY a currency pair

Let's take the idea of buying

What if you bought something (it could literally be almost anything...a house, a piece of jewelry or a stock) and it went up in value.

If you sold it at that point, you would have made a profit...the difference between what you paid originally and the greater value that the item is worth now.

Currency trading is the same way..

Let's say you want to buy the AUDUSD currency pair.

If the AUD goes up in value relative to the USD and then you sell it, you will have made a profit.

A trader in this example would be buying the AUD and selling the USD at the same time.

For example if the AUDUSD pair was bought at 1.0615 and the pair moved up to 1.0700 at the time that the trade was closed/exited, the profit on the trade would have been 85 pips.

Forex trading carries a high risk and losses can exceed deposited funds