What does it mean to 'Buy' and 'Sell'?

In the context of the foreign exchange or currency market, ‘buying’ and ‘selling’ essentially retains its original definition of getting a thing in exchange of payment for buy and getting payment in exchange of a thing for sell. The difference is that what you’re buying and selling is the currency themselves. You might be scratching your head now thinking what the heck does it mean. You buy and sell money using money, how is this making sense?

Well, in order to explain it simply, you do buy and sell money in exchange for money. The catch is that these money are in different currencies. Also, that these buy and sells are not something that is tangible. Meaning, all trades are done only in writing electronically. And of course, when you buy and sell, you either profit or lose. These resulting money is the one that may be liquidated.

What differentiates the forex market from the other markets is that unlike the stock market and the commodities market, the forex market has no one definite central exchange such as the New York Stock Average. What the forex market has is an interbank market. In other words, the exchanges and transactions are happening in a network of banks and financial institutions.

To buy, in the context of the Forex market, is to acquire a certain unit of currency for a certain price. To sell, in the context of the Forex market is to acquire payment from returning a certain unit of currency for a certain price. The catch here is that the currencies are always changing value depending on its environment, volatility, country performance, and other factors. The buying and selling then turns into a predicting game. And the main goal is to buy low and sell high.

Buying and selling in the forex market is simple if you know what you’re doing. Because despite the basic rule, there are a lot of factors that need to be accounted for to increase the chances of profit. In any case, the trick is to keep level-headed and do your research.