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In Forex Trading, you can either benefit by appreciation of exchange or by its depreciation.

There is a plenty of strategies to work in the forex market, but, in fact, they all boil down to two methods, based on the rise and fall of the course.

For greater clarity, let us consider technology transactions with decreasing and increasing rate by an example.

 

Depreciation

Let’s say you open a trading account in the company and deposited 2000 USD on it, chose EURUS as a financial instrument D and decided that the euro will soon go down.

Next:

Step 1: Open an order to sell of EURUSD lot 1at the price, for example, 1.4338. In view of a leverage of 1: 100 the deal took 1433,8 USD of your own funds.

Step 2: Wait until the price drops enough, for example, to the level of 1.3864.

Step 3: Close the position by buying back 1 lot of EUR, but at the price of 1.3864. In view of a leverage of 1: 100 the deal took 1386,4 USD of trading account.

Step 4: Calculate your profit. Trader Income is the difference between buying and selling prices. Thus, your income amounted to 4740 USD.

 

Appreciation

Imagine the opposite situation: you open a trading account with a deposit of USD 2000 and select EURUSD as a financial instrument, decide that the euro will go up soon.

Next:

Step 1: Open a buy position of 1 lot at the price of 1.3864, spending 1286,4 USD.

Step 2: Wait until the price will rise, for example, to the level of 1.4062.

Step 3: Open a position to sell  EUR USD lot 1at the new price.

Step 4: Calculate your profit. The difference between the total cost of 1 lot at the price of 1.3864 and 1.4062 for the price is 1980 USD.

 

Practical trading with Forex

It is important to remember that the basic idea of ​​how to make money on the forex market, does not guarantee a high profit from the first trading day. The key factors determining the success or failure of the trader is his ability to predict the price movement with the tools of technical and fundamental analysis of the market, as well as the experience and ability to control emotions. However, it is a full understanding of profit technologies  in a falling and a rising market, that serves as a  starting point of your successful trading and investment activities.

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