Buying Versus Selling Currency [WORKING]

The second currency (USD) is what you use to settle the bill.If you think the Euro will get stronger or the Dollar will get weaker, you Buy (Go Long). If you think the opposite, you Sell (Go Short). 2. The Psychology of the Trade

often occurs during political instability, "safe haven" flows (selling risky currencies to buy Gold or USD), or when a central bank prints more money (inflation).

This is an act of utility or speculation . In the retail world, you "sell" a pair even if you don't own the base currency. You are essentially borrowing the currency to sell it now, hoping to "buy it back" later at a cheaper price. 3. The Hidden Cost: The Spread You’ll notice two prices: the Bid and the Ask .

This is an act of faith . You are betting on the growth, stability, or rising interest rates of a specific nation’s economy. You want to hold that "asset" because you believe its value will appreciate.

The first currency (EUR) is the "basis" for the trade.