Page 7 - NOT FOR SELL SIBUSISIWEFXupdate_Neat
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A Trade Example:
You think that the Euro will rise against the Dollar so you “Ask” the EUR-USD Currency pair. You are
correct, the price rises and you close the trade.
The EUR/USD was trading at 1.2750 when you asked (bought) it.
The EUR/USD was trading at 1.2890 when you bid (sold) it.
You bought at 1.2750 and sold at 1.2890 for a profit of 0.0140 or 140 pips.
If your trade had been worth $100,000 each pip would have been worth $10.
On 140 pips X $10 you would make a $1,400 profit.
In Forex, you also have the opportunity to short sell (Bid first) a currency pair if you think it will fall in
price.
Another Trade Example:
If you had thought that the Euro was going to fall relative to the U.S. Dollar, you would have Bid on
the EUR/USD currency pair. Again, you were correct and you closed your position for a profit.
The EUR/USD was trading at 1.2760 when you bid it.
The EUR/USD was trading at 1.2610 when you sold it.
You sold at 1.2760 and closed your position at 1.2610 for a profit of 0.0150 or 150 pips.
Again your position was $100,000 making each pip worth $10.
150 pips X $10 = $1,500 profit.
Remember that these are profitable examples.
Always evaluate your positions carefully; ending up on the wrong side of a trade can be very
expensive.
