How Forex trading works
5 min read · Educational content, not financial advice
To place a trade, you select a currency pair, choose a direction (buy or sell), set a trade size, and typically define a stop-loss and take-profit level. Your broker's platform sends that order to be matched or filled, either against its own liquidity or that of external market makers/banks, depending on the broker's execution model.
Once filled, your position shows a live, floating profit or loss that updates with the market price. You can close it manually at any time, or let it close automatically when price reaches your stop-loss or take-profit.
Behind the scenes, brokers earn revenue through the spread (the small difference between the bid and ask price), a commission per lot, or both — which is why comparing broker cost structures matters as much as comparing headline spreads.