A large number of forex traders trade forex nowadays because they realize that forex trading brings potential of making big money. But it is not easy to trade forex successfully. Only 5% of forex traders are able to make relatively big money. So if forex traders want to get profit out of forex trading, the first and most important thing is to learn how to trade forex. Today, I will state how to make money by trading forex.
First, forex is traded in forex market, which is an intangible and the hugest financial market worldwide. Forex traders are able to trade in this market without worrying about manipulation. In this market, forex traders are allowed to trade many currencies in the world. In forex trading, foreign currencies are traded in pairs. Let’s take EUR/USD, the mostly traded currency pairs, for example, a currency quote for a EUR/USD pair is 1.3131. In this example, the base currency is the euro and the U.S. dollar is the quote currency. In all currency pairs, the base currency is worth one unit, and the quoted currency is how much one unit of the base currency can buy. So, in this example, one euro can buy 1.3131 U.S. dollars. Forex trading is betting that quoted currency will appreciate in value relative to the base currency in the near future or the base currency will depreciate in value.
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