What is a currency pair?

Very basic question I know , but what is a currency pair?
I know it is the simultaneous buying one currency and selling of another, but why do that other than for specuLation?
Obviously if I buy shares in GlaxoSmithKline, I would g e t dividends, a nd there is tessa possibility of a share price rise. But I what hAve you got with a currency pair, and what can you do with it other than sell it?
And how does forwarding differ from spread betting?

You may want to look here

That doesn’t tell me why you would buy the pair. What do you own? How it differs fro spread betting.

Actually it does tell you why you would buy a pair (if you think Euro will go up relative to Usd, you would buy Eur/Usd), and what you would own (nothing, just the right to close your EurUsd trade whenever you wish).
Ive never looked into spread betting so won’t attempt to answer something I don’t know about.
Have to tried the school tab further up the page?

[QUOTE=“Killer queen;774093”]That doesn’t tell me why you would buy the pair. What do you own? How it differs fro spread betting.[/QUOTE]
Fx Currency pair are two country cash value against each other and trading their strong or weaknesses through chart
Spread bet , cfd , futures … all does the same thing going long , or short down on them ,variety of products
Most of same concept but still have differences
I leave that part to pros member to explain further

[B]Q:[/B] Why would you buy the pair?

[B]A: You don’t actually “buy” a pair,[/B] or a currency, or anything else, in the retail forex market.

But, let’s use the term “buy” for now, just to give an answer to your question.

You would “buy” a pair because you believe the base currency will appreciate with respect to the quote currency. That can happen in various ways.

  1. The base currency can get stronger, while the quote currency remains unchanged or gets weaker.

  2. The base currency can gain greatly in strength, while the quote currency gains less strength.

  3. The base currency can remain unchanged, while the quote currency declines in value.

  4. The base currency can decline in value, while the quote currency declines even more.

[B]Q:[/B] What do you own?

[B]A: You don’t own any currency, except the currency in your account.[/B] In forex trading, you never actually “buy” or “sell” anything. Instead, you speculate (gamble) on the future price of a currency pair.

We use the terms “buy” and “sell”, because we are in the habit of doing so, from decades of trading stocks, bonds, commodities, etc., where actual stuff actually gets bought and sold.

And we use the terms “buy” and “sell”, because we are too lazy to say “go LONG”, “go SHORT”, “liquidate a LONG position”, or “cover a SHORT position”.

Because you never “buy” or “sell” anything in this market, your account currency will never be converted into any other currency. Your broker does not have foreign currency to “sell” to you, and he will not “buy” foreign currency from you.

Every position you take in the retail forex market will be accounted for in terms of your account currency. If your account is denominated in USD, and you take a position in GPB/JPY, the change in value of the pound sterling with respect to the yen will be converted (internally, in your trading platform) into USD, and reported to you as profit (or loss) in U.S. dollars. In this hypothetical trade, neither you nor your broker ever performs any transaction in pounds sterling or yen.

You will read in many places, including in the Babypips [I]School of Pipsology,[/I] that “buying” a pair means buying the base currency and selling the quote currency. This is misleading; this is false; and this incorrect information should be removed from the School curriculum.

[B]Q:[/B] How does it differ from spread betting?

[B]A: In concept, there is no difference, at all.[/B] The differences are in the details and in the terminology.

Many forms of gambling which are illegal in the U.S., are legal in the U.K., including online gambling. So, the Brits don’t hesitate to call online currency trading what it is: [I][B]betting.[/B][/I]

Here in the U.S., we try to hide the fact that it’s gambling, by calling it “speculating”. Some silly folks even refer to it as “investing in currencies”.

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