How to make a profit with FX

Geko is here.

The way to make a profit in FX is simple and straightforward.

• Buy at a low rate and settle at a high rate
• Sell at a high rate and settle at a low rate
  

As long as you follow these two basics, you can make a profit.




To what extent can you expect to profit?

Regarding this, there is a balance between the amount of funds and the amount of risk you are willing to tolerate, so a clear standard cannot be shown.




For example, suppose you aim for 20 pips profit on a single trade.

In USD/JPY, 20 pips corresponds to a price movement of 0.2 yen.

• With a trading volume of 1,000 units, a profit of 200 yen
• With a trading volume of 10,000 units, a profit of 2,000 yen
• With a trading volume of 100,000 units, a profit of 20,000 yen

If you simply calculate, you can see different profits depending on the amount you trade (lot size).




So wouldn't bigger trade sizes be better?




You might think so, but you need to be careful when increasing or decreasing the lot size.

Because, the larger the lot size,

the required margin also becomes larger (a larger amount of capital is required)
and the amount of potential loss when a loss occurs becomes larger (risk management)




As a result of aiming for 20 pips of profit, the market can reverse and you could incur a loss

This is a common occurrence in FX trading.