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The forex market is not a simple money making market. There may be someone out there who say that it’s so simple that anyone can trade forex. Is it true? |
Just as any other investment vehicles or businesses out there, forex is not for everyone and even though forex trading provide large potential rewards, it also comes with large potential risk of losing money.
Learn To Trade The Forex
What is a pip ?
Pip is the acronym for “price interest point” , it is the most common increment of currencies.
If the EUR/USD moves from 1.2250 to 1.2251, that is ONE PIP.
A pip can be viewed as the last decimal place of a quotation. The Pip is how you measure your profit or loss.
What is Lot?
Spot Forex is traded in lots.
The standard size for a lot is $100,000. There is also a mini lot size and that is $10,000.
Since currencies are measured in pips, to take advantage of these tiny increments, you need to trade large amounts of a particular currency in order to see any significant profit or loss.
Learn To Trade The Forex Example
GBP / USD
Buy at price 1.1950
Price rises to 1.2000 Profit 50 pips
Mini Account
1 pip = USD 1
Win by pips
50 pips X USD 1 = USD 50
Win by lots
10 pips X USD 1 X 5 lot = USD 50
Standard Account
1 pip = USD 10
Win by pips
50 pips X USD 10 = USD 500
Win by lots
10 pips X USD 10 X 5 lot = USD 500
If you want to learn to trade the forex by knowing more about pip and lot, go to http://www.babypips.com/school/know_your_ps_and_ls.html
The Forex industry is the biggest financial market and one of the fastest growing business on Earth today, the volume of daily currency trading has risen from a mere $50 billion to $2 trillion in just the past ten years.
As in any other business venture, it is wiser to learn and exposed more before you jump into any market. Forex made simple may be a good start where you learn some basics about the currency exchange market.
Learn to trade the forex as it may be one of your multiple streams of passive income (if you know how to autopilot your trading). However, always be reminded that it comes with higher risk when you treat it more like a gambling market, which is not recommended.
Look for a trustworthy and reliable forex mentoring if possible.
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