In Forex, you deal with currency pairs. There are four main currency pairs: British Pound and USD (GBP/USD), Euro and USD (EUR/USD), USD and Japanese Yen (USD/JPY), USD and Swiss Frank (USD/CHF).
In each currency pair, the first currency works as commodity and the second one works as money. For example when you choose GBP/USD to trade, if you buy, you buy British Pound against USD and if you sell, you sell British Pound against USD. It doesn’t matter what currency you have in your account. The trading software takes care of the exchanges and transactions automatically.
How can you make money?
Buying low and selling high or selling high and buying low is the base of making money in Forex. For example If you buy GBP against USD when each GBP is equal to $1.9554USD and then sell it when it is $2.0235USD, you have made a profit. I don’t want to focus on more details in this article and explain how the profits and the money you make will be calculated. I will talk about these topics in other articles.
But the big question is that how you can find out the best time to buy and how you can predict that if you buy, the price will go up and you will make a profit? This is the most important question that makes you a successful trader.
There are two methods to know the optimum time to buy and sell: Technical and Fundamental Analysis.
In technical analysis, you can predict the direction of the price using the the price chart analysis and also with the help of some special tools that are called Indicators.
In each currency pair, the first currency works as commodity and the second one works as money. For example when you choose GBP/USD to trade, if you buy, you buy British Pound against USD and if you sell, you sell British Pound against USD. It doesn’t matter what currency you have in your account. The trading software takes care of the exchanges and transactions automatically.
How can you make money?
Buying low and selling high or selling high and buying low is the base of making money in Forex. For example If you buy GBP against USD when each GBP is equal to $1.9554USD and then sell it when it is $2.0235USD, you have made a profit. I don’t want to focus on more details in this article and explain how the profits and the money you make will be calculated. I will talk about these topics in other articles.
But the big question is that how you can find out the best time to buy and how you can predict that if you buy, the price will go up and you will make a profit? This is the most important question that makes you a successful trader.
There are two methods to know the optimum time to buy and sell: Technical and Fundamental Analysis.
In technical analysis, you can predict the direction of the price using the the price chart analysis and also with the help of some special tools that are called Indicators.
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