How to Make Money from Forex Trading
Forex trading can not be separated from the concept of buying and selling. You can read the basic forex education edition of Forex Trading Concepts here. Yes, right. The concept of buying and selling is aimed to benefit from the positive difference between the purchase price and the selling price.
If you buy something (anything … home, jewelry or merchandise) at a price value and sometime later the price moves up, then you will get the potential profit or profit (not yet realized). Then if you sell it at that moment, you make a profit (already realized). The concept of buying and selling should be in pairs. If you buy then you have to sell it for the results realized. Conversely, If you sell then you have to buy it at a later time for the results to be realized.
Yes, that’s the concept of forex trading and how to earn money from forex trading.
Let’s look at the case examples to make it more clear. Such as you want to buy an AUDUSD pair. If the AUD is relatively moving up against USD and then you sell it, you will benefit. Purchasing the AUDUSD pair means the trader buys AUD and sells USD at the same time.
You buy AUDUSD pair at 0.74900 and the pair is moving up to 0.76400 and you decide to sell the pair. Then you get profit trading reaching up to 150 pips, the difference in the buying and selling price in pips. See this article if you do not know pips yet, Know Isitilah Pips.
Suppose the AUDUSD pair is down to 0.74750 and then you sell the pair, then you will experience trading losses up to 15 pips. Why is it called a trading loss? Because the difference between the buying and selling price is negative.
Forex trading will be more interesting for you when you know the techniques or strategies to manage to buy and sell in the Forex market. Knowing the pattern of price behavior and the indications shown by the pair price itself can provide unlimited profit potential. Do not forget also, you must know the techniques or strategies to manage risks in this forex market.