|
|
New to Forex
What is Forex Trading?
|
|
|
|
|
How an FX Trade Works
In this market you may buy or sell currencies. The objective is to earn a profit from your position. Placing a trade in the foreign exchange market is simple: the mechanics of a trade are virtually identical to those found in other markets, so the transition for many traders is often seamless.
|
|
|
|
|
Trader's Action |
|
Euros |
US Dollars |
|
|
|
|
A trader purchases 10,000 euros in the beginning of 2001 when the EUR/USD rate was .9600. |
|
+10,000 |
-9,600 |
|
|
In May of 2003 the trader exchanges his 10,000 euro back into US dollar at the market rate of 1.1800. |
|
-10,000 |
+11,800 |
|
|
In this example, the trader earned a gross profit of $2,200. |
|
0 |
+2,200 |
|
|
|
|
|
