So now that you know how to calculate pip value and leverage, let’s look at how you calculate your profit or loss.
You are probably wondering how a small investor like yourself can trade such large amounts of money. Think of your broker as a bank that basically fronts you $100,000 to buy currencies. All the bank asks from you is that you give it $1,000 as a good faith deposit, which it will hold for you but […]
Forex is commonly traded in specific amounts called lots, or basically the number of currency units you will buy or sell. A “lot” is a unit measuring a transaction amount. When you place orders on your trading platform, orders are placed in sizes quoted in lots. It’s like an egg carton (or egg box in British English). When you buy eggs, you usually […]
Forex currency pairs are quoted in terms of ‘pips’, short for percentage in points. In practical terms, a pip is one-hundredth of one percent, or the fourth decimal place (0.0001)
Buying and selling in forex is speculating on the upward and downward price movements of a currency pair, with the hopes of making a profit. All forex trading involves buying one currency and selling another, which is why it is quoted in pairs. You would buy the pair if you expected the base currency to strengthen against the quote currency, and you would sell if you expected it to do the opposite.
“Long” and “Short” First, you should determine whether you want to buy or sell. If you want to buy (which actually means buy the base currency and sell the quote currency), you want the base currency to rise in value and then you would sell it back at a higher price. In trader talk, this is called “going […]
Many people like trading foreign currencies on the foreign exchange (forex) market because it requires the least amount of capital to start day trading. Forex trades 24 hours a day during the week and offers a lot of profit potential due to the leverage provided by forex brokers.
Because forex is so awesome, traders came up with a number of different ways to invest or speculate in currencies. Among the financial instruments, the most popular ones are retail forex, spot FX, currency futures, currency options, currency exchange-traded funds (or ETFs), forex CFDs, and forex spread betting. Trade Forex In Different Ways It’s important […]
Unlike the other markets, forex trading does not have to stop when the sun goes down. Since the market is open 24 hours a day, you can trade when it is convenient for you. Also where it is convenient, so where you are does not matter as long as you are online.
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