Method explained here http://andylank.com/cash-flow/ What is pip in forex trading

1. What Is Pip In
FOREX Trading?

2. Currencies are traded in pairs. In
essence, you exchange one
currency for another based on the
relative value of the pair. In Forex,
you either go short (sell) or long
(buy) a trading pair. For instance,
the dollar-yen pair (designated as
USD/JPY) is one of the most
commonly traded currency pairs.
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3. It's possible to trade any two
currencies of the world, but that's a
bright idea really, as you need to be
trading two currencies that have
larger financial powers. It doesn't
necessarily mean that you should
be trading currencies of two of the
most powerful countries.
Switzerland is a major currency
when it comes to forex trading,
even though it's only a relatively
small country. The reason why it's
a big player in the forex world, is
because the Swiss bank are
important globally.
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4. TREND. It is important to analyze
the trend of the selected currency
pair in forex market. Forex charts
with indicators can ease the
process of choosing the most
profitable currency pair. Most
currency pairs are simply more
trendy than the rest. TRADING
SESSIONS. The most profitable
time to trade forex is when the
market has a lot of trading
transactions. Depending on the
currency pair, you will have to
adopt to the right trading time.
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5. A short position is the opposite side
of a long position. A trader makes
money in this trade by selling a
currency pair and then buying it
when the price drops. She wants to
make a profit by buying the
currency pair back at a less
expensive price than she originally
sold it. Forex and securities
markets allow traders to sell assets
they do not own, or in some cases,
traders may borrow a security, sell
it and then buy it back for profit
and return the security. One way
to think of short positions is that a
trader holds a negative amount of
the currency pair.
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6. Retail customer Any party to a
forex trade who is not an eligible
contract participant as defined
under the Commodity Exchange
Act. This includes individuals with
assets of less than $10 million and
most small businesses. Spot market
A market of immediate delivery of
and payment for the product, in
this case, currency. nice the
discipline trader can make
profit,people mistake forex trade
for a get rich quick scheme.
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