This is the main question that every forex trader wants to know about, how to make money on the forex market. Perhaps, maybe I could be wrong too even I say that if the word “profit” is removed from forex, no single person will touch the forex market. You might have heard the stories of earning of million dollars from forex. This is a very important topic and I would like to write for it more in detail.
How to Make Money on Forex Trading?
The exchange rate of currencies is changing (up and down) each second in the forex market and we can take profit or loss from this.
In the forex market, people would buy a currency pair at a lower price and sell it at a higher price. The difference between the buy and the sell price known as Spread. Spread is the commission that the forex broker received from the clients.
For example, you buy €1000 against US dollars. Suppose, the exchange rate of EUR/USD at the moment that you book a position is 1.5000 so you will pay $1500. Now later, the exchange rate of EUR/USD is changed to 1.6000 means increased. You sell your €1000 and get $1600 with a profit of $100.
If, the EUR/USD exchange rate is changed to 1.4000, means decreased. And you sell your €1000 and get $1400 with a loss of $100.
If you think this is the big amount of money that everyone cannot support, therefore a broker can support you with leverage. It is a worth you borrow from your broker with a specified ratio e.g. 1:100, 1:500, and 1:3000 etc.
That’s how can we make and loss money in the foreign exchange market.
How Much Money Can You Make with Forex Trading?
Forex doesn’t require money but required knowledge. It is not much easy to work at the start to loot the foreign exchange market. In the beginning, you will get losses until you learned the forex market up and down.
If you want to work in the forex market for a long time, then you have to clean the greed of making more money in the forex market from your mind. You must have to follow the market principals.
You can earn money from the forex exchange market as the loss you can bear. It’s all depends on your money management.
Assume you start a business and you have no idea about it running, loss and failure will be the destination of you. Similarly, if you don’t know the forex it will loss you how much amount you will be deposited. You can start the forex with an extremely low amount and earn money more than your expectation.
If you are new to forex, you must learn a complete basic course on the forex trading. You can also follow our profitable free forex signals and strategies.