This situation is called a bullish trend which is created by strong EUR or weak USD
1. First you have open a buy order (we will discuss this later) to buy EUR/USD currency pair
2. Let’s think now the value of the currency pair is 1.2536
3. Imagine now the Forex market value is getting increased. You must place a buy order only when the value is going up
4. When the market value reaches 1.2574, you should close the order
Your Open Price = 1.2536
Your Close Price = 1.2574
Profit = Close price – Open Price = 0.0038 = 38 pips
1 pip = 0.1 dollar
Profit = 38*0.1 = 3.8 dollars
How to Make a Profit When the Value of a Currency Pair Decreases
This situation is called a Bearish Trend which is created by a strong USD
1. The Forex market has gone down in this situation due to some reasons
2. First you have to realize that the market value is going down. You have refer the information sources for that.
3. You should place a sell order in this situation to make a profit.
4. Now you will place a sell order at the value of 1.1625
EUR/USD = 1.1625 means you need 1.1625 USD to purchase one EURO
5. Imagine the value has reached to 1.1538 and now,
EUR/USD = 1.1538
Earlier you needed 1.1625 USD to purchase one Euro but now you need only 1.1538 USD to purchase one Euro. It means that the dollar has been strong.
6. The USD value has gone up from 1.1625 to 1.1538, and then you can earn a profit of 0.0087
We call this sell order because first currency is Euro in the currency pair when placing both the buy and sell orders
So when you are placing the sell order you will buy USD and when you are placing the buy order you will buy EUR
Calculation of Gain/Loss
1. The Forex market has gone down in this situation due to some reasons
2. First you have to realize that the market value is going down. You have refer the information sources for that.
3. You should place a sell order in this situation to make a profit.
4. Now you will place a sell order at the value of 1.1625
EUR/USD = 1.1625 means you need 1.1625 USD to purchase one EURO
5. Imagine the value has reached to 1.1538 and now,
EUR/USD = 1.1538
Earlier you needed 1.1625 USD to purchase one Euro but now you need only 1.1538 USD to purchase one Euro. It means that the dollar has been strong.
6. The USD value has gone up from 1.1625 to 1.1538, and then you can earn a profit of 0.0087
We call this sell order because first currency is Euro in the currency pair when placing both the buy and sell orders
So when you are placing the sell order you will buy USD and when you are placing the buy order you will buy EUR
Calculation of Gain/Loss
For example let’s say that you are going to invest on a currency pair which is having 5 pips. Then you will have a profit but this depends on the lot size you are investing. Imagine you invest in a standard lot which is having 10 dollar pip value (GBP/USD). Then you will have a profit of 50 dollars (5*10). But if you select 10,000 dollar lot, the pip value will be 1 dollar. then your profit will be low.
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