Trading Scenario – Trading Rising Prices
If you believe that the euro will strengthen against the dollar you'll want to buy euro now and sell it back later at a higher price.
• You buy euro We quote EURUSD at Bid 0.9875 and Ask 0.9878, which means that you can sell 1 euro for 0.9875 USD or buy 1 euro for 0.9878 USD.
In this example you buy euro 100,000, at the quote price of 0.9878 (ask price) per euro.• The market moves in your favor Later the market turns in favour of the euro and theEURUSD is now quoted at Bid 0.9894 and Ask 0.9896. • Now you sell your euro and get the profit You sell euro at a Bid price of 0.9894. • The profit is calculated as follows Sell price-buy price x size of trade
(0.9894 minus 0.9878) multiplied by 100.000 = USD 140 Profit
(Note that the profit or loss is always expressed in thesecondary currency)
Category: Trading Scenario – Trading Rising Prices
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