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One of the new forex traders’ puzzle questions; How do I make money trading forex?
You make money from forex by looking at the current value of the currency in the pair on the market chart in relation to the state of its economy.
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 its current value. 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, 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. like we said for a buy trade. However, when you are selling and a trade moves to the opposite direction which is the upward direction, you make a loss.