Forex Trading Tips.

Probably, it is not easy for a beginner to understand how to earn on Forex, we suggest you to consider an example of such earnings.

After opening a real account in a bank for 2000 Euros, you plot the top and the lowest border on the chart of euro against the dollar and make up your mind to sale 200.000 euros (2 lots) from the top border at the price of 1.2850 (the price bid) dollars for one Euro.

Euros are down on your account. The company gives you 198.000 euros for free to your 2000, so you have 200,000 Euros in all, then you sell them, putting an inquiry for sale. Taking into account a leverage real pledge makes ten times less, than quantity sold, that is 200,000 / 100 = 2,000 Euros (effect of a leverage). This sum will be a security for credit (marginal) operation on your account, and this is maximum possible security, because there are no more funds on your account. 200,000 Euros at the rate of 1.2850 make 257,000 dollars.

Then during a day the price falls to the lowest border (in our example to 100 points). You decide to buy sold 200,000 Euros at the price of 1.2750 (the price ask) dollars for one Euro that makes 255,000 dollars. The bought 200,000 Euros become written off from your account automatically, and the odds remain on the account.

So, you earn the odds between sold and bought that makes 257,000 – 255,000 = 2,000 US dollars. Exchange fell 0.8 per cent (from 1.2850 to 1.2750), and you could earn on it 78.43 % from your initial account in 2000 Euros during one day.

The second profit opportunity on Forex is based on increasing the price quotations of a currency couple EUR-USD:

You think that euro exchange rate to US dollar (EUR-USD) will rise. There are 2,000 cents on your account. At the price of 1.2750 you buy 1,500 Euros for 1,500 * 1.2750 = 1912,50 US dollars.

It is possible to do out of the proceeds of credit, which allows you to do your banking in the limits of sum exceeding your account by 100 times (in this case the maximum possible sum for trading operations makes 20 * 100 = 2,000 US dollars).

Quotation of the day is rising after a time. You sell 1,500 Euros at the rate of 1.2850, and receive 1,500 * 1.2850 = 1927, 5 US dollars.

As a result, you bought cheaply and sold expensively, the odds are 1927, 5 – 1912, 5 = 15$ and there are your earnings. You earned 75 %, when the rate rose by 0.8 %.

Company takes the commission as a spread; this is a difference between “bid and asked” that makes 30 dollars in our example.

The choice of a foreign currency trading service is not an easy task. And one shouldn’t hurry up to make a decision on such a service.

It is very important that you follow a final piece of advice – today the web technologies give you a really unique chance to choose what you want for the best price on the market. Strange, but most of the people don’t use this chance. In real practice it means that you must use all the tools of today to get any foreign currency trading info that you need.

Search Google or other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and participate in the discussion. All this will help you to build up a true vision of this market. Thus, giving you a real opportunity to make a wise and nicely balanced decision.

P.S. And also sign up to the RSS on this blog, because we will everything possible to keep this blog tuned up to the day with new publications about the topic of foreign currency trading companies and important trends on the currency exchange market.