FOREX Principles

FOREX Principles

Trading in FOREX means that you are buying and selling one nation's currency for another. The value of any currency fluctuates throughout the day and with various interactions of politics and other financial events. Being able to interpret when to expect these changes - and where, will enable you to forecast when you should buy or sell. In the Foreign Exchange, one currency is always sold and another is purchased in the same transaction. You buy, for instance, 110.21 Japanese yen for 1 dollar. This means that for every dollar you trade with, you can buy 110.21 yen at that time. Tomorrow, however, the Japanese yen changes in value to 110.25 dollars. Now, a dollar will buy more yen - which means that when you sell your yen at that price you have made a profit – called pips.