Hey FX.COM. Could you opine regarding the following statement?
"Despite what the School lessons are teaching, there is no buying or selling of currencies, or currency pairs, in the retail forex business (our tiny corner of the huge, worldwide foreign exchange market)."
"Your broker doesn't maintain an inventory of foreign currencies to sell to you, and he isn't in the business of buying currencies from you.
Instead, he is in the business of taking the other side of your trade, whether long or short, at a price which he dictates. This places him in the position of counterparty to your trade, and he remains in this position until your trade is closed."
"So, if your long trade does not involve buying the base currency and selling the quote currency, and if your short trade does not involve selling the base currency and buying the quote currency -- as the School lessons incorrectly teach -- then what exactly is happening when you place a trade?"
"Your trade is simply a bet on the direction that a particular price will move. And your broker simply holds the other side of your bet."
The Ever Just Hangin Out VIPER