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HOW MONEY IS MADE IN TRADING

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HOW MONEY IS MADE IN TRADING BUY LOW, SELL HIGH Forex traders make money by speculating on the movement of currency rates. There are only two ways to do this. The first way is to buy, expecting prices to rise. The second way is to sell, expecting prices to fall. For Example Buy The current rate for AUD/USD is now 1.0325. You enter into a buy position because you expect the Australian dollar to strengthen further against the U.S. dollar. A buy trade is termed a “long position” in the forex market. After three hours, the AUD/USD rate is at 1.0375. You were right, and you made 50 pips on this trade. Another way of saying this is that your long position took profit. Let ’s have a look at Example . Sell The current rate for EUR/USD is at 1.3142. You enter into a sell position because you expect the euro to further weaken against the U.S. dollar. A sell trade is termed a “short position” in the forex market. After two hours, the EUR/USD rate is at 1.3112. You