Comments on: Total Basics of Forex Trading

By: Ryan Peters

Ryan Peters — Fri, 19 Mar 2010 21:31:26 +0000

I’m a total forex newbie. Thanks for sharing this with me. I’ve been wondering what some of the things you above meant. This has been helpful.

Thanks,
Ryan

By: Jeff Hokins

Jeff Hokins — Mon, 15 Mar 2010 02:38:41 +0000

Thanks for sharing this with us Brian!

By: Charles Hires

Charles Hires — Fri, 12 Mar 2010 02:55:01 +0000

How are pips money? I understand that the prices are quoted in pips, but how does that translate to dollars (so I make money?)

By: Rapid Forex

Rapid Forex — Fri, 12 Mar 2010 02:32:55 +0000

Charles,

When you are doing a transaction at your forex broker, you’re implicitly trading the USD (if you’re in the US) underneath the transaction. After you exit the trade, you’re left with dollars in your account (or euros if you were trading in Europe). If you look at your account balance while demo trading, you’ll see the dollar amount of your account fluctuate as well.

Let’s say you have a forex account and you live & trade in the US.

Let’s also assume that you want to trade the GBP/JPY (doesn’t involve the USD).

When you buy the GBP/JPY, you’re converting dollars into GBP & JPY to do the transaction because that’s what’s in your account. You don’t see it because it’s done automatically by the broker, but technically it’s happening.

I hope this helps clear things up for you…