Learn to Trade Forex

Profitable Forex Trading is based on two simple ideas: Buying Low then selling high, and selling high then buying low. Because exchange rates change continuously, currencies are continuously increasing or decreasng in value, realtive to another currency.

Buys and sells, are signalled in terms of base currency. The base currency is the first currency that is named in the currency cross

If the exchange rate will appreciate BUY (Buy Euro, Sell USD)

If the exchange rate will depreciate (Sell USD, Buy Euro)

If there is upward trend BUY (Buy Euro, sell USD)

If there is downward trend SELL (Sell USD, Buy Euro)

Always think of buying or selling the base currency. For example, the Euro is the base currency in the quote for EUR/USD

If you think that the Euro is going to appreciate (depreciate) realtive to US dollar. You should buy (SELL) Euro, then later on when the exchange rate has increased (decreased). SELL (BUY) the EURO to realize your profit. The profit is the difference between buying and selling price.

This is best shown graphically. Note that this is a simplified explanation. This graph represents the gains from both a BUY trade and a SELL trade.

This chart shows recent price history of EUR/USD cross. This shows time on the horizontal axis and price (exchange rate) on verticle axis.

Assume on the 1yh of August you strated with 128.000USD, and swapped it for 100,000 Euro. Then on 22nd of August your 100,000 Euros can buy 129,000 USD. Congratulations! You have just made 1,000 USD on this trade (in this case 1000 pips)