HOW TO EARN MONEY THROUGH FOREIGN EXCHANGE TRADING
there are so many ways to earn money online, and one of them
is forex also known as foreign exchange trading where you can earn money from
your currency trading and if you need more information about forex online
trading, it is better for you to click THIS LINK.
Investors can trade almost any currency in the world. Investors, as
individuals, countries, and corporations, may trade in the forex if they have
enough financial capital to get started and are astute enough to make money at
it. How someone makes money in the forex is a speculative process: you are
betting that the value of one currency will increase relative to another.
Currencies are traded, and priced, in pairs within the
forex. For example, you may have seen a currency quote for a EUR/USD pair of
1.2131. In this example, the base currency is the euro and the U.S. dollar is the quote currency. In all
currency quote cases, the base currency is worth one unit, and the quoted
currency is the amount of currency that one unit of the base currency can buy.
So, in this example, one euro can buy 1.2131 U.S. dollars. How an investor
makes money in forex is by either an appreciation in the value of the quoted
currency, or by a decrease in value of the base currency. (For an overview of
foreign exchange, read A Primer On The Forex Market.)
Another way to look at currency trading is to think about the position an
investor is taking on each currency in the pair. The base currency can be
thought of as a short position because you are "selling" the base
currency to purchase the quoted currency, which can be seen as the long
position on the currency pair. In our example above, we see that one euro can
purchase $1.2131 and vice versa. To purchase the euros, the investor must first
go short on the U.S. dollar in order to go long on the euro. To make money on this
investment, the investor will have to sell back the euros when their value
appreciates relative to the U.S. dollar. For example, assume the value of the
euro appreciates to $1.2141 - on a lot of $100,000 the investor would gain
US$100 ($121,410 - $121,310) if he or she sold the euros at this exchange rate.
Conversely, if the EUR/USD exchange rate fell by 10 pips to $1.2121, then the investor would
lose US$100 ($121,210 - $121,310).
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