What is a Forex deal?

Components of a Forex deal
A Forex deal is a contract agreed upon between the trader and the market-
maker (i.e. the Trading Platform). The contract is comprised of the following
components:
• The currency pairs (which currency to buy; which currency to sell)
• The principal amount (or "face", or "nominal": the amount of currency
involved in the deal)
• The rate (the agreed exchange rate between the two currencies).
Time frame is also a factor in some deals, but this chapter focuses on Day-
Trading (similar to "Spot" or "Current Time" trading), in which deals have a
lifespan of no more than a single full day. Thus, time frame does not play
into the equation. Note, however, that deals can be renewed ("rolled-over")
to the next day for a limited period of time.
The Forex deal, in this context, is therefore an obligation to buy and sell a
specified amount of a particular pair of currencies at a pre-determined
exchange rate.
Forex trading is always done in currency pairs. For example, imagine that the
exchange rate of EUR/USD (euros to US dollars) on a certain day is 1.5000
(this number is also referred to as a "spot rate", or just "rate", for short).