Explanation on – How can we make money by trading Forex? There is deeply explained about Forex and how to start earning with Forex. This is very basic topic to understand for Forex traders.
Forex- Foreign exchange currency market is Biggest market in the world. Almost more than 5 trillion dollar exchange everyday by banks , institutes , ECN traders and retail traders. Forex is decentralized or over the counter (OTC) market , it means the exchange rates are not set or control by any exchange or authority. exchange rate virtually flow against each other.
Forex always trade into pairs like Euro/USD , GBP/USD ,USD/INR. first currency is base currency and other one is counter. Lets understand by this simple transaction.
Suppose you live in USA and go on a trip to Europe and you are not allow to spend your home currency in Europe. It means you have to convert your US dollars into EUROS. you go to a retail exchange store and ask for today’s exchange rate. you get quote USD/EUR = 0.80EUR
Now you want to convert 1000 USD TO EURO 1000USD *0.80= 800EURO
Related Topic: Trading War
AFTER SOME TIME YOU DECIDE TO GET BACK YOUR MONEY INTO USD AND ONCE AGAIN YOU GO BACK TO RETAILER AND ASK FOR A QUOTE , YOU GET A DIFFERENT QUOTE NOW.
LET SAY NOW EXCHANGE RATE CHANGE AND NOW EUR/USD = 1.30 USD
YOU HAVE SAME 800 EURO WHEN YOU CONVERT BACK INTO USD 800 EUR*1.30 = 1040 USD
Hence doing this EUR/USD trade we made profit of $40. because originally we had only 1000USD but we took advantage of exchange rate and make some profit out of it.
Trading Forex is simple , easy and very profitable as compared to other kind of investments. If you want to make carrier in Forex Trading contact me on email@example.com or visit our website www.foxamoney.com.