Tuesday, July 5, 2011

Two Ways Opportunity in Forex Trading

In the world of forex trading is known the term Two Ways Opportunity. What is Two Ways Opportunity?
Investors have the opportunity to gain profit, both when prices rise or when prices fall. For the concept of profit if the price rises may not need to explain because it is a reasonable concept, we buy something when it's cheap (Open Buy) and hope the price goes up then sell it (Sell Liquid), profit obtained from the difference between the selling price with the purchase price.

Well what if prices go down? How to get profits?

Forex Market is very large market, namely the international market worldwide, and transactions happen quickly.
Concept to profit when the price comes down is:

Sell ​​when the price is expensive
buy back when prices fall

How can I sell if I have not bought?
It could, because anyone would to lend to you!

A simple example is Consignment in the world trade system, which we loaned goods by the Supplier for sold and we do not directly pay when we receive the goods. After the goods are sold to our customers (of course more expensive than the purchase price to the supplier), then we pay back to our supplier with a cheaper price than the selling price to our customers.

Well in Forex Trading as well, when you open a Sell Position, then you borrow another person position to be sold and you must return it again with purchase from the market, certainly we hope when buy in repayment, the price is cheaper (down) than when we sell / borrow.

This process is carried out by the system through the stock, so we do not know from whom we borrow / open sell position and from whom we purchase / closing sell positions plus with a global Forex Market then there's always those who sell or buy on time.

Well this is the concept of Open Sell, open Sell Position (sell) and expect the price down so that we can cover (Buy Liquid) with a lower price. Profit gained from the difference between the selling price with the purchase price. But if until prices rise above the purchase price (Open Buy), then you lose. So keep be careful!

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