How To Trade Forex - Making Money from the Markets

31
Jul

Making Money from Forex

To make money out of the Forex market a trader must make pips from either going long or short in the market.

Market moves up we BUY (Long)

Market moves down we SELL (Short)

A single pip is the forth decimal place of the exchange rate. For example EUR/USD - 1.3273

A trader must speculate on the movement of one currency pair against the other.

Bull (Long) and Bear (Short) Markets

When the market is going long (up) this is called a Bullish market and when the market is going short (down) this is called Bearish market.

 

Examples of Pips

Take £1 = 1.5229 USD
The last two digits are what is important which is referred to as 'Pips'
When trading the Yen there are only 2 Decimal places - example USD/JPY 97.91

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