HOW TO MAKE MONEY TRADING FOREX, THE TRADE PROCESS

On the Forex market we are trading currencies, exchanging a currency for another. So we buy a currency hoping its value will increase compared to the value of the one we are selling. Yes, we at the same time, buying a currency and selling another currency. An example may be a little more understandable. We have dollars and want to buy euros. The pair traded here is EUR/USD and the exchange rate is 1.25. You can read it like this 1 euro equals 1.25 dollar. We hope that the euro value will be higher so that later we will buy more dollar. The exchange rate increase to 1.35 in this case we bought 1 euro using 1.25 dollar, and it now equals to 1.35 dollar. So we exchange out 1 euro back into dollars and now have 1.35. We bought 1 euro for $1.25 and sell it back for $1.35. We made a 10 cents profit. Of course on the forex market you will not by only one euro, this will be few hundreds or thousands, depending on y9ur budget and the leverage offered by the broker. Exchange rates are always moving. When i say that you hope the value will increase. many factors can be used to predict the rate, based on technical or fundamental analysis. we take the same pair as above starting with the same exchange rate (1.25) we want to sell euros  so we can by it later a lower price. here we hope or know that the value of the euro will depreciate. we sell one euro for $1.25. The exchange rate drops to 1.15. That means that now we only need 1.15 to buy our euro back. We exchange our dollars back into euros and again, make a 10 cents profit. When you buy or sell, you always buy or sell the base currency. the base currency is the first one in the pair. in the pair EUR/USD the base currency is the euro and the USD is called the quote currency. When you decide to buy, you buy euro and sell dollars. When you decide to sell, you sell euros and buy dollars. Think that you always need to exchange something two times. If you buy something and want to make a profit from it. you would prefer to sell it at a higher price. and so, if you are selling something that you will need to buy again, you would prefer to have it at a lower price.