Every position involves the selling of one currency and the buying of another, e.g. USD vs. Yen or USD vs. Swiss. Buying and selling of forex in forex trading is done in pairs of currencies. Under this, two different currencies get quoted. One currency is called the base and the second constitutes the quote or counter currency.
There is always a long (bought) and short (sold) side to any forex transaction. One buys Euro (long) in exchange for yen (short) or sell sterling pound (short) in exchange for Euro (long). Profits or losses are reflected in the second currency.
The seven main currencies are USD, JPY, EUR, GBP, CAD, AUD, CHF (Swiss Franc). The most important currency pairs called the majors are EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/AUD and USD/CAD.
A major is the most liquid and widely traded currency pair in the world. All major forex trades account for more than 90% of the total daily transactions.
If Swiss franc is going to appreciate against dollar, then sell dollar and buy Swiss Franc and the like. While deciding which way a currency is going to move, listen to economic data and other financial information.
Potential for profits exists as long as there is movement in the exchange rate. This is because one side of the pair is always gaining. All that is necessary is that an investor has to be on the right side.
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