This paragraph from a website and i want to understand it in street words , please tell me what is saying here in simple words :
“Because you’re not buying anything physical, this kind of trading can be confusing. Think of buying a currency as buying a share in a particular country. When you buy, say, Japanese Yen, you are in effect buying a share in the Japanese economy, as the price of the currency is a direct reflection of what the market thinks about the current and future health of the Japanese economy.
In general, the exchange rate of a currency versus other currencies is a reflection of the condition of that country’s economy, compared to the other countries’ economies. ”
Investments, Stocks, Bonds and All About The Money
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Find a better website. They couldn’t explain a circle without confusing someone.
When trading in Forex, you are buying and selling currencies, one against another. You buy yen using dollars. Later on, you have to sell yen and get dollars back to finish the trade. You can do this with any currency pair, and you can buy either one first.
Buy yen with euros.
Buy sterling with chinese yuan.
Whatever.
You just have to do the other half later on to close the trade.
Is that more clear?
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