The main objective of a Forex trader is making a profit. Profit is the result of the successful deals while currency movement. A deal is an agreement to buy/sell a financial instrument while trading. When a trader makes a deal, s/he is planning that the price of the currency s/he is buying will rise and that the price of the currency s/he is selling will go down. Trader’s analyzing skills and the ability to forecast currency rates changes influence his/her chances to make profits and be successful.

After opening a position, you will see a "Profit " or "Loss " based on currency rate changes/movement. While the position is open, the trader is " on the market " Closing the position is " a must " on the Forex market. As soon as the trader closes the position, the profit or loss is fixed on the account and s/he "exits " the market.

Forex deals consist of 3 main steps:

1. Choosing the right moment to make a deal
2. Opening the Buy/Sell position for the chosen currency pair
3. Closing the position and obtaining the results of the deal

Example:

A Trader opens an account and deposits $500. The account t balance is now $500. This is the money used for trading.

The trader reads the economic events calendar and finds news about interest rates. Based on the news, s/he concludes that the EUR/USD rate will be going up and decides to make a deal based on this information. The trader opens a position and buys 0.5 EUR/USD lots.

The ECB (European Central Bank) releases its decision on the interest rate in a while. The news says that interest rates will rise. The EUR/USD rate goes up. Now, the deal makes a profit. The trader watches the data on the opened position in order to determine the most profitable time to close the deal.

The optimal time to close the deal arrives. The trader closes an opened deal and makes a profit.

Therefore, a EUR/USD deal trader gets $346.5. His/her balance has increased to $846.5 from $500.

Step 1: Understanding the foreign exchange market Contents Step 3: Trading terminal installation