How To Profit or Loses on Forex
You can buy or sell on the Forex market.
Opening trade is very easy. The process of opening trade is simple and if you have the experience of trading in the stock market, then you can understand it quickly. Profit or Loses on Forex, now you know how pairs create an asset, let’s look at how trading prices are determined. When you trade forex, you’ll see two prices associated with the trading asset. The bid price (the smaller number) and the ask price (the bigger number). When you buy (or go long) on a pair, you open an order at the ask price and then close at the bid price.
Suppose you bought 10,000 euros for EUR / USD at 1.1800 exchange rate, at $ 11,800. After two weeks the EUR / USD exchange rate increased to 1.2500. Then when you sell it for $ 12,500 dollars you will gain $ 700 dollars.
The exchange rate is the ratio of prices of another currency relative to currency. For example, the exchange rate of USD / CHF indicates how many USD against 1 Swiss Franc can be bought at the exchange rate or 1 UK. come. How much does Swiss Franc need to buy dollars?
How to read Forex quotes:
At each trade, you buy a currency and sell another. Therefore, the price of the currency pair in the forex market is expressed through quotation.
GBP/USD foreign exchange rates are as follows:
The previous currency of the slash (/) is called the base currency and the subsequent currency of the slash (/) is called the quote currency.
Here GBP is base currency and USD is the quote currency.
At the time of buying, the exchange rate indicates how many units quote currency to buy for 1 unit base currency.
For example: For buying 1 British pound, 1.5125 Dollars should be paid. When selling, the exchange rate indicates how many unit quotes can be found by selling 1 unit base currency. For example, if you sell 1 British pound you will get 1.5125 USD dollars.
The base currency is the basis of the buy and the sell. If you buy EUR /USD, you are buying the base currency EUR and at the same time selling quote USD. In one word, buy in EUR, sell in USD.
If you believe that the currency pair will be stronger, the base currency will be stronger than the quote currency.
If you think the base currency will weaken then the quote currency then you can sell.
First of all, you have to decide what you want ? buy or sell.
If you want to buy (buy base currency and sell quote currency), that means you want to increase the base currency price and you will sell it at a higher price. Long term or long positions in the trader’s language. Remember, long = buy.
If you want to sell (buy base currency and buy a quo currency), that means you want to reduce the price of the base currency and you buy it at a lower price. Take short or short positions in traders’ language. Remember, short = sell.
Two prices are shown in all Forex quotes. Bid and Ask. Almost every bid price is less than Ask Price.
The bid is such a price that the broker wants to buy a base currency instead of the quote currency. In other words, bid for sale is the best price.
Ask is a price at which the broker wants to sell the base currency instead of the quote currency. In other words, the best price is to buy.
The difference between a bid and an ask is known as the spread all over the world.
The price quoted at EUR/USD is 1.3456 and the Ask Price is 1.3458.
That is, spreads 2 pips here.
If you click on sell you can sell it at 1.3456. And if you click on the buy, you can buy it at 1.3458.