In this two minute Tuesday episode I’m going to go back to the basics and I’m going to teach you what forex is and how you can make money from it [Music] welcome back to the channel everyone my name’s artie and this is the moving average a show where we discuss everything day trading to keep you profitable on a consistent basis I’m really going to try to do it under two minutes so let’s get into my great little papers you’ve probably heard the term forex thrown around what does it stand for it stands for foreign exchange to exchange your currency for a foreign currency if you live in the United States and you’ve ever traveled to Mexico for vacation this is going to be your first introduction to foreign exchange every international airport has a currency exchange kiosk where you exchange your currency for that country’s currency for example when you travel to Mexico now if you give them one dollar they will give you 20 pesos that’s the current exchange rate so i if you exchange a hundred dollars you will get 2,000 pesos just to put it in perspective when i was a kid like 13 when we would go to Mexico travel, the exchange rate was 1 to 10.

Basically you can have a lot of fun in Mexico with a dollar tacos tacos now we can get into the deeper stuff, let’s look at euro US dollar this is the most traded currency pair and right now for one euro you would need 1.13 , now you might be asking yourself what does this mean and how do I make money from it when trading currency pairs . A standard lot is a unit of measurement of the amount you buy, for example if euro is USD 1.13 and you want to trade one standard lot which is one hundred thousand units .

to place that trade you need one hundred and thirteen thousand dollars the current price multiplied by the number of units that you can see here in the third and fourth decimal places of this price if it were to go up from this price to this price that would be a difference of 10 pips which is basically a difference of 1,100 of the price so with your original purchase of 113,000 you would have an additional 100 which is the act of buying at one price and selling at a higher price you are making the difference of a hundred dollars that is your profit now don’t get confused because it could easily go the opposite direction and you could lose just as much money that is why a clear understanding of technical analysis basic financial fundamental analysis as well as months and months of studying and practicing is going to help you make money instead of losing money if you want to learn the basics of technical analysis i have a fantastic beginner playlist that you can find here and if you enjoyed this video and you have some value from there, make sure you like comment and subscribe makes me feel good about myself , thanks a lot for watching and we’ll see you in the next video

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