Here is a quick little update on my FOREX results after a full business week, although the market is opened 24/7. If you don’t know what I am doing, then quickly check out, Diving into Forex. I somehow managed to make $15,189.00. The print screen of my report shows all the transactions I have done (Click here if you need a larger image).
Some people have asked me; what change determines the gain? Well, just like a change in stock price times the number of shares determines the gain/loss in the stock market, with Forex the changes in value of currency times the volume of currency that I have deteremines the the gain/loss in Forex.
For example we can take the first transaction listed on my report, EUR/USD. A change between currency is called “pip” and depending on what trading platform you use, the further decimal places they can go. On the report is seems like my platform goes 5 decimal points. So now we take the difference between what was bought (1.42020) and what was sold (1.42915), and then multiply that by the volume (100k). This gives us our gain/loss.
(1.42915 – 1.42020) 100k = $895
As we can see the change was really not that much (0.00895), but because we were able to get such a large amount of volume (100k) it made the gain much bigger. That is one of the key points of Forex is about. The ability to leverage and buy a lot of currency, with less money; however, this can be really risky because you can also lose a lot of money. One of the next things I plan to learn more about is leveraging, which is basically buying currency on margin.
What do you think about my results so far? Is there something I am missing, not realizing, or need to learn?