That become objects in forex trading is looking for the advantage of the change in a value of one currency against the currencies of its companion (pair). A rough example of how to benefit in forex is roughly like this:
You open a long position (buy/sell) in the pair EUR/USD at the exchange rate of 1.1800 1 lot. This means we buy 100,000 Euros if in a Regular account, or 10,000 Euro in the mini/micro account at the exchange rate of 1.1800 currency USD.
We assume that the price of moving up and three weeks later you close long position (buy/sell) at the exchange rate of 1.2000. When closing the transaction positions can It is said you Exchange back the Euro bought previously (when opening position) back to USD.
From the example above we can see that we are getting a profit of 200 pips. This value is obtained from the difference in exchange rates when closing a position with the exchange rate at the moment We open positions (2000-1800 = 200). Because of the open position of 1 lot, the advantage 200 pips it could mean $200 in a mini account, or the account in the$2000 standard (depending on account type).
This advantage derived from the multiplication of the magnitude pips gained in time the magnitude of the lot are used. in a standard account, one lot average worth $10/pip.
Exchange rates (exchange rate) simply put is the ratio of the value of one currency against his partner.
For example, USD/CHF exchange rate shows how many u.s. dollars are needed Switzerland francs to buy one, or how many Swiss francs necessary to buy 1 American dollar.
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