In return for this assistance by the broker they will ask you an amount for each trade you are opting to do. This amount is known as the spread and determined by the size of the lot and currency pair you trade. You will make money from currency trading, though deciding in which direction a specific currency trading pair are moving. This is called the trend trading and called as follow:
Short / Bear market / Sell (all the various names with the same meaning) – You will profit if the market goes down. A bear market is any market that appears to be falling or decrease in price.
Long / Bull market / buy (all the various names with the same meaning) – You will profit if the market goes up. A bull market is any market that appears to be rising or increase in price.
Currency, if done correctly should be done cautiously and always keep the following in mind.
– Always put in a stop loss. This is to make sure that if a trade goes against you, you will be taken out of the trade without losing all your capital invested.
– Always verify your decision to do a specific trade, by about 3 different methods. Once you have confirmation by all, you can decide to either sell or buy.
Hope this article assisted you. Happy trading.
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