Each Forex trade can theoretically be viewed as a ‘spread ‘ trade where to spreadbet forex one currency you must sell another. Convention dictates that currencies are measured in units per 1 USD. 1 USD is worth approximately 1. Settlement is in two day, or sometimes less.
The most popular trades are between the US dollar and either Sterling or the Euro. Your risk is that a currency bet could go the wrong way. To protect yourself, enter your trade with a target level and a stop loss. 20,000 and you have chosen to use 100:1 leverage on your account. You place a market order to buy 1 lot of 100,000 Euros at 1.
3228, expecting the euro to strengthen. At the same time you place a stop-loss order at 1. 3203, and a limit order at 1. 31, reaching your limit order at 1.