There is a dynamic relationship (like the internal workings of a watch) between international foreign currencies (forex market). Each international currency can be paired with another to form a value ratio when exchanging between the currencies of the pair. Examples of forex trading currencies are the US Dollar, the British Pound, the Japanese Yen, the Russian Ruble, etc.
It is dynamic in that the ratio of value between any two currency pairs changes from moment to moment.
This moment to moment change is what creates the Forex, or international foreign currency exchange, market.
For a basic conceptual example, if i know that at a particular moment I can buy 1 Euro for 2 US dollars, I can execute the trade (buy) through a broker for a certain amount of Euros in exchange for my US dollars. When I do, I will then be looking for a later increase in the US dollar’s value in relationship to the Euro in order to reverse the trade, thereby making a profit. So, say that at a later moment, 1 Euro can be exchanged back for 2.25 US dollars, a profit is obvious moving from the Euro to US dollar direction. For every 1 Euro that I trade back, I will receive $2.25 US dollars, instead of only the original $2 US that was spent to purchase the Euros in the first place.
The actual profit will be determined by the amount of the respective trade (investment) that the investor is able/willing to make.
You can see with the example pair above, the forex market allows a profit potential in either direction. If, I would have started with the Euro, in the example above, I could have spent 1 Euro for every $2.25 US dollars. Then, waited for the Euro to gain value to reverse the trade. So later, if the exchange rates fluctuated by allowing me to spend $2 US dollars for each Euro in return, I would realize a net profit. Again, the size of the profit would be determined by the amount of money invested.
The secret to making realistic and consistent money in the forex day trading market is to learn how to predict accurate entry and exit points for executing each particular trade.
This bilateral direction allows for forex profits to be made in a long or short manner, just like stocks and bonds. Therefore, regardless of the global economy situation, money can always be made.
