Resolved Question
I saw a video saying traders make money when rate increase or decreases?
Recently while watching a video i saw them saying that traders make money when rate increase or decreases, i am unable to understand when the value decreases how one earns money. Can anyone guide me?
about 1 year ago
Best Answer - Chosen by Voters
In forex, you can go long or short... This means you can either buy or sell a currency pair.
Let's take EUR/USD for instance. Let's also say that EUR/USD is trading at 1.2000.
If you buy 10,000 units of EUR/USD (you are buying euro and selling dollars), you want the exchange rate to rise. So, if the rate rises to 1.2100, and you sell back your 10,000 units of EUR/USD with a profit.
If you sell 10,00 units of EUR/USD (you are selling euro and buying dollars) you want the rate to decrease. So, if the rate decreases to 1.1900, and you sell back your 10,000 units of EUR/USD, you will come out with a profit.
To get a more in-depth explanation on this concept, just check out the links I have attached below!
about 1 year ago
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Answers (1)
Hey mate! I suggest you join and participate in the BabyPips.com forums. There are lots of helpful traders who help and guide newbies like us :)
about 1 year ago
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ad2478
Thanks a lot for guiding me :)
about 1 year ago
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