Calculating Forex Profit & Loss For Dummies

Calculating Forex Profit & Loss For Dummies

Nowadays, to make it easier for forex traders to trade, the majority of trading platforms automatically do the profit and loss calculations for you. Certainly, it makes the whole process of trading much more convenient, however, if you want to know how it is calculated, then I believe this article will be very useful for you.

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Buy Currency

When trading in the forex market investors learn how to buy currency and sell currency in order to make a profit. Currencies are only bought and sold in pairs and the value of a currency is determined as a comparison to another currency. The first currency of a currency pair is referred to as the base currency and the second currency is referred to as the quote currency. The currency pair price equals the ratio of one currency valued against the other so the currency pair shows how much of the quote currency is needed to purchase one unit of the base currency. The buying and selling of foreign currency is so popular because it can be traded 24 hours a day, among other reasons. You can read more about the advantages and advantages to trading forex online in previous newsletters.

Market Direction

How can big profits be made on the long side with such a huge decline in the markets? The gains were derived by recognizing oversold conditions and candlestick reversal signals. This allowed for short-term trades to produce excessive profits. The Doji, that formed in the Dow in mid-October, revealed the end of the severe downtrend that was foretold by the Dumpling Top pattern that had formed all during the summer