You have to buy low ones to make money on the Forex market
Sell and high, pretty simple. Let ‘s take a look at the following example:
By trading currencies, how much money can you theoretically make?
Let ‘s assume you have 1,000 US dollars in your trading account. Compared to the US dollar, the current euro exchange rate is 1.25. In other words, you get one dollar and 25 cents for 1 Euro. You predicted that the Euro would increase against the US dollar during the day.
You are buying 800 Euros for your 1,000 dollars based on this forecast. Your prediction is correct! The euro is rising from 1,25 dollars to 1,26.
You decide to close the trade and exchange 800 Euros back to 1.008 dollars as a profit. In effect, 8 dollars is your profit from this trade. Not a lot of that, right?
You raise a fair question:
If you can increase profits, you can use leverage to maximize your profit potential. Leverage is a loan that Exness offers you for Forex trading. The size of the loan may vary, but exness offers you up to 500 times more funds than your original capital, which also increases 500 times your profit potential.
Great, right?, Still, please remember…
Increased leverage not only means more potential for profit, but also more risks! It is very important to manage your risks! Let ‘s take a look at an example of how one to five hundred (1:500) leverage is used. You have the same $1,000 on your account and you estimate that the Euro will increase compared to the US dollar, so you decide to take your broker ‘s largest possible loan of $499,000. Now, you’re exchanging all your 500,000 dollars for 400,000 euros at the 1.25 exchange rate. You exchange 400,000 Euros back to 504,000 dollars at the moment when the exchange rate rises to 1.26. As a result, after returning the loan to your broker, you now have 5,000 dollars in your account. Your net profit, then, is $4 000.
An incredible result after just one day of trading!
We have looked at the scenario in this instance when your prediction turns out to be right. But what would have happened if the Euro had dropped against the US dollar instead of rising? Your trade would be open in this case until your losses equal your initial deposit,
That’s 1,000 bucks. Your trade is automatically closed at this point and the broker takes back the loan. As a result, a situation where you can lose a loan from a broker is almost impossible.
Taking everything into account, you’ve now seen how leverage, if you make the right decisions, can increase your profits. At the same time, leverage can work against you as well,
If you make incorrect estimates and you do not limit your losses.
Why I trust exness, let me tell you: exness likes to see customers succeed in trading
Your funds are secure and separate Low Forex Exness spreads (or the difference between purchase and selling price) increase your profitability
With a small initial deposit of $100, you can test your trading abilities on global markets.
Up to 1:500 leverage can be used (one to five hundred Exness enables all trading strategies, including scalping, news trading, arbitration, and in extremely short time executes trades.