How to Make Profit? So, how is profit made through the trades of the Forex? Every currency irrespective of the nation and the economy of the nation is influenced by two universal economic dissertations or corollaries: The currency value of any certain economy, tends to be influenced by the performance and growth of the economy, with respect the base currency. Similarly, the exports, development, disasters, internal banking, companies and other such countless features, which even include, wars and terror attacks, substantially affect the value of quote currency with respect to the base currency. Now, both the aforementioned conditions tend to affect the values of both the base and quote currency. In this kind of situation you can make profit with the help of measures, namely: After you invest into the quote currency, you can wait for the quote currency’s market value to raise, which increases your purchasing power to buy some other currency or re-buy your original base currency. So basically just by investing into well rising economy you are at position with higher currency value. The second type of measure which you can initiate is to wait till the value of your base currency drops down. Thus you shall be able to easily have a greater purchase value as you reconvert back into the base currency. In this measure, however you would not be able to convert your quote currency into any other currency than your base, as it may be either a situation of loss or a no-profit-no-loss situation. Measurement of Profit or Loss In this mechanism of Forex trade, one very big problem is that the Forex trade is characterized by the conversion of currencies, which is basically a barter. Hence there is no uniform way to measure profit or loss. In such a situation, the concept of PIP and BP is used.
Posted on: Sat, 14 Sep 2013 14:53:32 +0000
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