Resolved Question
Does a forex transaction, as in the actual exchange of the currencies traded, take place immediately?
Does a forex transaction, as in the actual exchange of the currencies traded, take place immediately? For instance, if I were to long the USD for GBP, when I close the trade are the currencies exchanged on the spot?
about 1 year ago
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For retail brokers (everyday joes like you and me! ), online brokers provide us the opportunity to trade by allowing us to take positions (trades) without actually having the hard currency. In essence, the actual physical exchange of currencies will not take place, but rather, we take positions in currency pairs. For example, if you went long gbpusd, you would never actually hold any of those pounds. Eventually, you will have to close this position with a profit or a loss (or breakeven! ) and this will be reflected in your account balance.
about 1 year ago
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Answers (1)
The forex transactions take place immediately through your broker. You open a position an immediately you sell one currency and buy another.
about 1 year ago
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soulja4lyf
I can understand that we are not actually receiving any physical form of the currencies traded, but what I don't understand is that how can there be no actual transaction? Please explain to me in detail the complete process of a transaction in the forex, including where the profits are realised from (Im referring to the physical profits) etc. Also, whether the transaction takes place immediately, as in, when I close a trade do I have the profits in my account straight away, ready for immediate withdrawal? Unfortunately, Im having trouble getting a clearcut unswer to my question. Your help is greatly appreciated. Thanks.
about 1 year ago
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