The concept of trading makes sense to me. You believe an asset or currency will either go up or down.
For stocks, say for example I buy 1 share of ‘xyz’ company for $10. Then, tomorrow comes and ‘xyz’ is worth $15 now. I decide I want to sell my 1 share of ‘xyz’ company for $15. This means someone else across the internet purchased my 1 share of ‘xyz’ company for $15.
I picture the transaction in my head, as if it’s the old days and I had to physically go to a brokerage and buy the share for $10, and now I have a slip of paper of “xyz” company. And then the next day I walk to the brokerage and sell that 1 share, and now I have $15 in my hand.
Now with how would I envision this with a forex trasnaction?
say I am clicking “sell” EURUSD at 1.0800 with 1 standard lot. Then tomorrow comes and The spot price of EURUSD is 1.0700 and I decide to close my position with a +100 pip profit
. Was I selling a contract of “EURUSD”, or was I selling USD, or buying EUR?
How would the transaction of “sell” EURUSD at 1.08 and close at 1.07 look like if it were done in person?
Thank you in advance.
P.S. I’ve been on and off trading for almost a year now, but this question no one can seem to answer. I appreciate your help.