Best way to make Money with MoneyThe best way to make money with money.
What do you do to earn money by dealing money?
An investor can deal in almost any global asset, and that is currencies (Forex), if they have enough funds to start. To make money in FX trading, you should be conscious that you are taking a gambling venture - you bet that the value of one will rise against another.
As an example, you may have seen a quotation of 1.1256 for a EUR/USD cross. For this example, the basic currencies are the euros and the US dollars are the quotation currencies. All quotes in currencies are denominated in the basic currencies as one denomination and the denomination is the amount of money a denomination in the basic currencies can buy.
On the basis of our example above, this only means that one dollar can buy 1.1256 US Dollar. The way an individual makes money in foreign exchange transactions is done either by revaluing the value of the listed foreign exchange or by depreciating the underlying one. What do you do to earn money by trade money?
A further way to look at Forex is to think about the positions an investor takes in each FX cross. Basic currencies can be considered shorts, as you "sell" the basic currencies to buy the listed currencies. On the other hand, the listed denomination can be seen as the long part of the denomination price.
Our example above shows that a single EUR can buy $1.1256 and $1.1256 up. In order to buy the EUR, the trader must first buy from the EUR and buy from the US Dollars. In order to make money with this asset, the investors must resell the currency as its value rises against the US currency.
Let's say, for example, that the value of the EUR rises to $1.1266. At many $100,000, the investors would win $100 ($112,660 - $112,560) if they were to sell the currency at this foreign currency parity. On the other hand, if the EUR/USD dropped 10 pips to $1.1246, the trader would loose $100 ($112,460 - $112,560).