Forex Trading Case Study

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Forex trading is a way of investing, where currencies are bought and sold against each other depending on how you are the entrepreneur, based on your valuation or signal, believe that the money will go up and decrease in value against one another. When your broker offers you a price for a currency exchange, he offers two prices for each currency pair; a Bid price (you sell the offer) and an Ask price (you buy the asking price). These rules make sense if you feel like an auction; A person who wants to buy something at an auction puts an offer, which is the price they want to pay. In this case, the international bank wants to buy if you sell them on their bid price. Also, at an auction, someone who wants to sell something will have an asking price, which is the price at which he wants to…show more content…
Likewise, if you believe otherwise and expect the euro to weaken and the US dollar to strengthen, it will be bought in EUR / USD. Let your broker state you EUR / USD Sell 1.4192 / Buy 1.4195 and you want to shorten the euro in the belief that the purchase price drops to 1.3800, but probably not less than that. However, you also want to protect yourself against a huge loss and believe that your assessment is wrong if the purchase price is 1.4300. To set up such an exchange: Sell EUR / USD at the current selling price of 1.4192 Set a limit command to 1.3800 to get your profit of 392 pips Set a stop command to 1.4300 to reduce your loss to 108 pips In forex trading, you buy or sell financial instruments. Often, your broker will offer you forex trading through an instrument called CFD, which is a contract for the difference. By using a CFD to sell for example EUR / GBP, you can arrange for your broker for your gains/losses to save all the money you choose, so that your profits/losses for available pips or lose the money in any currency everything translates to gains or losses in US dollars for

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