How to make money on the Forex market?

In order to make money on forex you need to buy low and sell high, fairly simple. Let’s take a look at the example: How much cash is it possible to theoretically make by trading currencies?. Let’s assume that you have 1,000 US dollars on your own trading account. The existing exchange rate of Euro versus the united states dollar is 1.25.

Basically, for 1 euro you get one dollar and 25 cents. You forecast that throughout the day Euro would rise versus the united states dollar.

Predicated on this forecast you get 800 Euros for your 1,000 dollars. Your forecast is correct! Euro rises from 1.25 to at least one 1.26 dollars. Being in profit you choose to close the trade and exchange 800 Euros back again to 1,008 dollars. In place, your benefit from this trade is 8 dollars. Not that much, right?

You raise a good question: Would it not be possible to improve profits To be able to maximize your profit potential you may use leverage. Leverage is financing Tickmill provides you to trade Forex. How big is the loan may vary but Tickmill gives you up to 500 times more funds than your initial capital, which also increases your profit potential 500 times.

Great, right?, Still, please remember... Increased leverage means not merely more profit potential but also more risks! Managing your risks is essential! Let’s take a look at an example how to use leverage of one to five hundred (1:500). You have the same 1,000 dollars on your account and you estimate that Euro will rise versus the US dollar therefore you decide to take the biggest possible loan from your broker 499,000 dollars.

Now, with the exchange rate of 1 1.25 you exchange all your 500,000 dollars to 400,000 euros. At the moment when exchange rate rises to 1 1.26 you exchange the 400,000 euros back to 504,000 dollars. Consequently, you now have 5,000 dollars on your account after returning the loan to your broker. So your net profit is 4 000 dollars.

An incredible result after just one day of trading! In this example we've viewed the scenario whenever your forecast actually is correct. But what could have happened if rather than rising Euro had fallen against the united states dollar? In cases like this your trade will be open until your losses equal your initial deposit, which is 1,000 dollars. At this stage your trade will be automatically closed and the broker takes back the loan.

Consequently, a case when you're able to lose broker’s loan is nearly impossible. Taking everything into consideration, you will have seen how leverage can boost your profits, if you make right decisions. Simultaneously, leverage may also work against you if you make wrong estimations and don’t limit your losses.

Without a doubt, why I trust Tickmill: Tickmill loves to start to see the clients flourish in trading Your funds are safe and segregated Tickmill’s low Forex spreads (or the difference between trade price) boost your profitability.

You can attempt your trading skills on global markets with a little initial deposit of $100 You may use leverage of up to 1:500 (one to five hundred) Tickmill allows all trading strategies including scalping, news trading, arbitrage and executes trades in extremely short time. For this reason Tickmill is highly respected in Forex community Visit to find out more!

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