How do you make money trading money?

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Your mission as a Forex trader should you choose to accept it is to earn as many pips as you possibly can. The more pips you earn in currency trading the larger your profits will be. So, what is a pip and why does earning them help you make money in Forex? The basic goal how to make money out of currency trading Forex trading is to swap one currency for another currency then cross your fingers and hope the currency you bought will increase in value relative to the one you sold.

Then once it increases in value you sell it back in order how to make money out of currency trading receive more of your original currency in exchange. However, there are many ways to accomplish this with Forex trading. Before we dive into the ways a Forex trader makes money, it is important to understand how a currency pair works. Well, what is an exchange rate? It is purely the value of one currency in relationship to another.

In other words it is the amount of Euros that a Dollar can buy or the amount of Dollars that a Euro can buy. Since exchange rates pit one currency against another they are quoted in currency pairs. The first currency listed is known as the base currency and the second is known as the counter or quote currency. The exchange rate will tell you how many units of the counter currency it will take to buy one unit of the base currency and vice versa.

Remember when you were a kid and traded baseball cards with your friends? Say you start with 1, U. You then hold onto your JPY for 2 weeks at which time your instincts prove correct because the U. There are several ways for you to make money on a Forex trade depending on whether you want to buy or sell the currency that is how to make money out of currency trading in your possession.

Your strategy here would enable you to buy more JPY back once the price dropped. Just remember that long equates to buying and short equates to selling. In the introduction to this article we told you that your goal was to earn pips.

So, what is a pip? Put simply, a pip is the smallest price change that a given exchange rate can make. Your profits and losses can be calculated in terms of how many pips you gained or loss. A pip is derived by comparing the starting rate to the ending rate.

The difference between the two is how many pips you gained or lost. You should now have a better understanding of how you can actually make money as a successful Forex trader. Remember, Forex trading is NOT easy — anyone who tells you otherwise is lying. Carefully prepare yourself and learn all you can before trying to execute any trades with real money. Once you feel comfortable then go out there and how to make money out of currency trading all the pips you can!

We respect your email privacy. Please note that Forex trading involves substantial risk of loss, and may not be suitable for everyone. Pick a Pair Before we dive into the ways a Forex trader makes money, it is important to understand how a currency pair works.

Theory of Relativity Remember when you were a kid and traded baseball cards with your friends? The Long and Short of It There are several ways for you to make money on a Forex trade depending on whether you want to buy or sell the currency that is currently in your possession.

Buddy, Can You Spare a Pip? Putting It All Together You should now have a better understanding of how you can actually make money as a successful Forex trader.

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