The Basics Of How Money Is Made

Question 1

If you buy a currency (AUD/ USD) pair and the base currency (AUD) rises in value relative to the quote currency (USD) and then you sell it, you will have made a …

Answer 1

Profit

Question 2

For instance, if a currency pair was bought at 1.0615 and the pair moved up to 1.0700 at the time that the trade was closed/ exited, the profit on the trade would have been … pips.

Answer 2

85

Question 3

Had the pair moved down to 1.0600 from 1.0615 before the trade was closed, the loss on the trade would have been … pips.

Answer 3

15

Question 4

If we sold a currency pair at 1.2320 and the price moved down to 1.2250 when we closed the position, we would have made a profit of … pips.

Answer 4

70

Question 5

Had the aforementioned pair moved up instead and we closed out the position at 1.2360, we would have had a loss of ….. pips on the trade.

Answer 5

40

Question 6

The currency on the left side is called the ….

Answer 6

Base currency

Question 7

The currency on the right side is known as either the …. or ….. currency

Answer 7

Cross / counter

Question 8

In the case of currency trading, when taking a …. position, you would … the currency in the pair that you were …. from your broker; if the price went…, you would then …. it back to the broker at the …. price. The difference between the price at which you …. it (the higher price) and the price at which you … it back to them (the lower price) would be your …

Answer 8

Sell; borrow; selling; down; sell; lower; borrowed; sold; profit