November 9

How To Get Most Profit In Trading

The principle of trading in forex in China is to buy low sell high and sell high buy low. Traders take advantage of the difference between buying and selling prices. When you estimate that the price will increase, enter a buy position, otherwise, enter a sell position if the price is expected to weaken. In forex, the price that is the benchmark is the exchange rate for a pair of currencies. Make sure you get more info at There must be a currency exchange rate pair with which to trade. There are 47 currency pairs in various countries around the world for forex trading.

Maybe with this currency pair, you are still confused about which currency we expect to strengthen if we buy and which one we expect to weaken if we sell. The benchmark is the base currency, which is the first position of the pair against its counter currency. So, when buying, we expect the base currency to increase in value, on the other hand, if we sell we expect to weaken. Let’s take an example of a popular pair, Eur/USD. Conversely, if you think that the USD will strengthen against Eur, then the position you are taking is selling Eur / USD.

In an Open Buy position, you expect the Euro to strengthen against the USD. In the example above, you buy at 1.1215 then the Eur / USD strengthens to 1.1216 (it takes more USD to buy 1 Euro). If the Eur / USD exchange rate strengthens, you realize a profit by closing positions and making a Close Buy. In an Open Sell position, you expect the Euro to weaken against the USD or the USD to strengthen. With the example above, suppose you buy at 1.1215 then the Eur / USD exchange rate weakens to 1.1211, which means you need less USD to buy 1 Euro. If the Eur / USD exchange rate weakens, you realize a profit by closing the position and making a Close Sell. The price movement in the forex is called PIP. This is an important reference that must be understood by forex traders and an important component to calculate how much profit and loss from forex trading.

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Posted November 9, 2020 by admin in category "Articles

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