WHAT IS FOREX? part 2

For example:

Let’s assume that you just have $100 on your commercialism account and wish to trade EUR/USD. Its charge per unit is one.25, which suggests that for one monetary unit you get one.25 United States bucks. charge per unit is sort of a tag at the food market – the sole distinction is that the worth tags on Forex area unit ever-changing all the time.

Then, you create a forecast – as an example, you suspect that monetary unit can rise versus the United States greenback.

Next, you purchase eighty euros for your $100 and watch for the charge per unit to vary.

Let’s imagine it rose from one.25 to 1.35 – it's a profitable scenario for you, therefore you'll be able to shut the trade at this time. Now, you'll be able to exchange your eighty euros back to 108 bucks, and find your profit of $8. 

If you think that this quantity of cash isn’t value bothering, there’s nice news: your broker will assist you create rather more cash with a special tool known as leverage. Leverage is funds you borrow from your broker to multiply your deposit.

For example, if you used the leverage of 1:3000 at FBS for the same trade from the previous example, you'd get $2400 with only one trade. So, you invest $100 and trade $300 000! mammoth, right?

Just remember: higher profit involves higher risk, therefore risk management is a crucial a part of trading!