How to Make Money on Forex
| Forex traders can make money or lose money by exchanging foreign currencies. The profits and losses occur when the price of these currencies fluctuate. The concept of buying or selling currencies may be difficult for some first-time traders to understand, but the general idea is actually quite easy. Check out the chart below. |
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Let's say the investor decides to trade Forex with a deposit of $200.
With a leverage of 50:1*, the investor can buy or sell up to $10,000 with an original investment of $200. If he sold $10,000 GBP against USD at 1.6650 and two weeks later bought at 1.5800, let's see how much money he would have made:
(1.6650-1.5800) X $10,000 = $850
He could have turned his $200 into $850.
However, if the investor would have bought GBP, he would have lost his entire investment, thus proving how important it is to take time to learn how to trade Forex.
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Forex trading (off-exchange foreign currency trading) involves substantial risk of loss and is not suitable for all investors. Learn more →
