Before I give you the definition of bullish and bearish, let us see a glance on how trader making money in forex.
Its actually very simple, which is buy low and sell high.
Example:
As being shown at the chart above we can enter the market by buy at the price of 0.9869. We take that point as the lowest price we can get from the market. As the time move, we can see the point start to go up at certain point that we can consider it as the highest it can go. When it hit at 0.9981 we decide to sell it. Let calculate how much profit that we get.
0.9981 - 0.9869
= 0.0112
To know how much you just take as profit, I need to teach you something that call Pip.
Quick Review : What Is Pip?
Pip is stands for “Percentage in Point”. A pip is the smallest price increment in forex trading. You can see many currency pair are always shown to 4 decimal point. However, any currency pair related to Japanese yen, there are only given at 2 decimal point. It is very important that you understand what a pip is in the forex trading because you will be using pips in calculating your profits and losses.
Now we continue,
0.9981 - 0.9869
= 0.0112 is 112 pip
For every normal forex broker, 1 standard pip is equal to USD $10.
$10 x 112 = $1120
So, just with 1 trade you already make $1120. Is it this simple? Definitely yes, this is how forex trader making money.
Don’t forget to read my post after this about the bearish and the bullish…coming up next..
For any further question or request question, please email me at forex.qna@gmail.com
