“How much could you earn with Forex" will depend on exchange rate spread and trading volume.
You can earn a bigger amount of profit with larger trading volume and larger forex rate spread.
Among investors or so-called traders, some could make over USD100,000/day.
Sample Forex trading
The USD/JPY after Trump was elected President of the United States
For example, if you “Buy at 111.250 yen, sell at 112.750 yen (close order)" in the above USD/JPY chart, you can make 1.5 yen profit calculated by the following formula “112.75 JPY – 111.250 JPY = 1.5 JPY “.
Even if you only invest USD 90, the total amount of profit made is about USD 1,064 for half a day.
This is possible because Forex trading offers “Leverage" that allows trading a large volume with a small capital
Maximum leverage level varies among Forex brokers.
How to calculate the needed investment
In this trading case, maximum leverage level is 888:1, with 80000 currency units and USD/JPY at 111.25 JPY
111.25 JPY × 80,000 currency units ÷ 888 = 10,023 JPY (Needed capital(JPY))
10,023 JPY ÷ 111.25 JPY = $90.09 (needed capital(USD))
Based on the calculation above, you can estimate that you would need mimimum USD 90.09 to trade 80.000 units.
To send 80, 000 currency units by forex transfer services you will needs 111.25 JPY x 80,000 currency units = 8,900,000 JPY ($80,000) but with Forex you can trade with US $90.09 by using leverage.
How to calculate profit
80,000 currency units × 1.5 JPY (spread) = 120,000 JPY (Profit)
120,000 JPY ÷ 112.750(rate as closing order) = $1,064(Profit(USD))
If you trade 80,000 currency units at 1.5 JPY spread, you will make such a profit as calculated above
Furthermore, if you can’t calculate the profit yourself, you can use the automated Forex tool to calculate real-time profit “MT4" for free.
※ No trading during Saturday and Sunday as these are non-working days.
How to start Forex
Advice for beginners
In Forex trading, trading some currency pairs can be very profitable while trading some others is not.
For major currency pairs, forex rates are volatile, therefore these pairs are frequently traded because chances of making a profit are higher.
On the other hand, trading less frequently traded or minor currency pairs might not be profitable because there are less traders in the market and exchange rates are less volatile.
Commonly traded currency pairs (easily making money from)
- EUR/USD (EURO/US Dollar)
- USD/JPY (US Dollar/ Japanese Yen)
- GBP/USD (Pound/US Dollar)
- AUD/USD (Australian Dollar/US Dollar)
- USD/CAD (US Dollar/Canadian Dollar)
- EUR/GBP (EURo/Pound)
- AUD/CAD (Australian Dollar/Canadian Dollar)
For more volatile currency pairs, their spreads are narrower therefore it’s easier to make a profit in trading
In practice, you only need to select “Sell" or “Buy" after providing trading volumeh. First you can practice trial Forex trading with , download free demo account for practice.
Analyzing chart to find opportunities to make a profit
Chart analysis or “Technical analysis" is an analysis on past exchange rates to spot the right timing to trade.
In the picture above, the line displayed on the chart is called “Envelope".
Trading with Envelope indicator in the chart above is the most simple technical analysis for beginners.
“Buy" if this this line intersects with the lower line and “Sell" if this line intersects with the upper line.
Forex trading time
Forex trading time, 24 hours on working days. No trading on Saturday and Sunday because the Forex market is closed on these two days.