How to make money on the Forex market
How to make money with the help of forexforex is a means of earning a lot of money with a relatively low capital. Although the yield from this currency market is quite high, we can not say about the high risks.
It is leverage that increases profits and risks. With the help of leverage (margin trading), most traders working with Forex get a large and stable income. The essence of leverage is that to buy a currency, you are given a zero credit, which allows you, if you have money on your Deposit, to make transactions for amounts that are several times higher than your capital (a maximum of 200 times).
If you have a sum of $ 100 on your Deposit, you will be able to make a transaction for a sum of $ 10,000 thanks to the leverage ratio of 100 /1, which will increase your profit (loss) by a hundred times.
For example, you expect the yen to increase relative to the dollar. If you have $ 100 on your Deposit, you buy currencies for 10,000 (leverage helps). as a result, if the yen exchange rate relative to the dollar was 85, and after a while it became 84, then buying the dollar back, you earn $ 119. If you make a mistake and the yen falls against the dollar, you will suffer losses that will depend on the exchange rate change.
In most cases, the Bank that gives you leverage will break the deal when the loss is close to the size of your Deposit. As you can see, using margin trading is quite risky, but it can bring a significant profit , in the example it was 219%, and you can also incur significant losses. Risk is a noble business, and in Forex it is also a profitable business. Whether you use leverage or not is up to you. But, in most cases, this is the only way to earn decent money.