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.Is Forex trading profitable?
This is a commonly asked question by most new traders. You actually did a very good thing to ask this question. To some other fellows who are still wondering whether you can profit from trading forex, here is the answer for you.
Yes.
Forex market has been in existence for many years and the fact that traders make around $5 trillion trades daily in volume in the forex market, this means that most of the traders are profiting from it.
Of course, like any other type of investment, Forex trading has its own inherent risks and potential for profitability or loss. Knowing how to control these risks is one way to increase your chances of profiting from your trades than make losses. It is unfortunate that some traders come up with very high expectations to make quick big profits and they just throw up their money without first understanding how the market works and how to profit consistently while trading. To profit from forex trading you need to consistently practice, discipline and to first learn the rules of the game.
How do forex traders make money?
You make money from forex by buying or selling currencies. these currencies are traded in pairs so you look at the current value of the currency in the pair in the market in relation to the state of its economy and decide whether to buy or sell the currency.
If the base currency of the pair, let’s say EUR/USD pair, here the base is the EUR, is stable or is expected to rise in value, you buy the pair at that current price. If price rises, you will see the pair rising in an upward direction on the market chart above where you bought from. The difference between the entry price and the closing price of a trade is your profit. However if the trade goes to the opposite direction, you make a loss.
On the other hand, if you expect the currency’s economy to be doing bad, this means the currency value will fall. Therefore you will sell the base currency at its current price as the pair falls to the down side. Your profit will be the difference between the entry price and the price at which you close your trade. To learn more about forex trading, read more on forex trading
