Placing a trade in the foreign exchange market is simple with today’s trading software. Furthermore, the mechanics of a trade are virtually identical to those found in other markets, so the transition for many traders is not difficult.
Example of How a Forex Trade Works
| Trader’s Action | Euros | US Dollars | |
| A trader purchases 100,000 euros in March 2003 when the EUR/USD rate was 1.0750. | +100,000 | -107,500 | |
| In May of 2003 the trader exchanges his 100,000 euro back into US dollar at the market rate of 1.1900. | -100,000 | +119,000 | |
| In this example, the trader earned a gross profit of $11,500. | 0 | +11,500 |