How can a trader make a profit from Foreign Exchange?

The most important for a trader is the meaning of the value of a currency pair. For example EUR/USD 1.2640 means that you can buy 1.2640 USD with 1 EUR. Remember: An easy rule to remember what this price means is to translate the numerator (EUR) in 1 and take the currency value to be the denominator. Some currencies have special names like Kiwi for New Zealand Dollar, Cable for Great Britain Pound and Aussie for Australian Dollar. If you become an active Forex trader you will hear these names often.

If I tried to explain you the mathecaticals behind Forex transactions you would get confused. I know it would sound like greek to you for now. But remember this rule of thumb, it is all you have to know: You buy in Forex when you believe that the currency pair value will appreciate (long position). You sell in Forex when you believe that the currency pair value will depreciate(short position). It is not so difficult, is it?

This entry was posted on Wednesday, March 14th, 2007 at 1:18 pm and is filed under How To Get Started With Forex. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.