How People Make or Lose Money in forex ?

Let's take a look at a simple example of how someone can make money from a forex transaction. Suppose you have $900 U.S. dollars and you exchange that for $1000 Canadian dollars. One week later, the CAD/USD exchange rate goes up from 0.90 to 1.0, so the Canadian dolar which you own has increased in value compared to the U.S. dollar. You could then exchange the $1000 CAD you have back into U.S. dollars and you would receive $1000 USD.


So you started with $900 USD, you now have $1000 USD, a profit of $100 USD.

Your Decision	CAD	USD
You buy 1,000 CAD at the CAD/USD rate of 0.90	+1000	-900
A week later, the CAD/USD rises to 1.00 and you exchange your 1,000 CAD back into U.S. dollars	-1000	+1000
Profit		+100