So you want to make money in the Forex market. Well to do so you need to come up with some strategies. As you now know you are not buying the actual physical currency – you are laying money on the movement of this currency. This is known in the trade as spread betting i.e. you are placing a bet that a currency price will move in the direction you want it to move in.

Currency movements are measured in “pips”. So you believe that sterling is going to increase in value against the dollar. You bet your money on this outcome and lock in a price at which you have made the bet. The price of sterling rises 20 “pips” over the value of the dollar (from the time of your trade) – if you had bet $10 per “pip” then you would have a profit of $200.