How to Make a Profit – Loss Account in Forex?
There are many basic concepts that you need to know about the forex market, which we mention about many advantages and transaction features. We advise you not to start forex trading without clarifying the issues you are foreign, and we want you to consider the training given free of charge. In this way you can easily limit the risks that may arise in the market and make safe transactions. You need to know that there is risk everywhere where money is concerned and you can not deal with these risks without knowledge or experience. One of the important issues you need to know in forex trading is profit / loss. As a result, investing in the forex market is the goal of making money and you must have information about your profits and losses. You can make a profit / loss account quite simply and it will be enough to know the values of the currencies and the four transactions. In the forex market, which has a very diverse portfolio of investment instruments, you can perform your transactions in pairs with the instrument of your choice. You do your profit and loss account on the value of these pairs according to each other.
There are a few key points you need to know before trading in the Forex market. At the beginning of these, investment vehicles are traded in pairs. For example; A person who wants to invest in euros can trade on the EUR / USD parity. The term parity means the ratio of one currency to another. Here, EUR, base currency and USD constitute the variable currency. Your profit / loss account is always calculated over the variable foreign currency.
If we are going to explain our transaction on the EUR / USD parity; Suppose you make a $ 1,000 purchase in the EUR / USD parity of 1,1350. Then I think parity rose to 1.1400. You will benefit from this transaction. You will make a profit of $ 5 since you are selling at a profit of $ 1000 and 0,005 for your transaction size.
Imagine the exact opposite and assume that the parity value falls from 1.1350 to 1.1300. This time you will lose 0.005 percent. You will suffer $ 5 because your transaction size is $ 1000. The profit / loss situation is calculated in USD / EUR exchange rate variable.