Forex retailers uses the practice of netting the spread which means taking the opposite side of the trade how does this practice work and is this practice only in Forex or in all kinds of investment?

Such brokers are also called Market Makers. These brokers do take opposite of your trade and benefit from you losing on your trade. This practice is popular in Forex Market because it is not centralized as other markets. For example DOW, CME, Nikki etc centralizes the whole process, every trade that is executed is goes via their server. So the price you see on your broken screen is the real price that everyone else sees. This however is not the case with Forex. A Forex broker can increase the spreads and prices thus varies from broker to broker.