How much you can make with forex trading is the amount of profit you make when you sell one currency for another. That is the percentage profit you make for selling a particular currency say dollar which you bought for a particular price for another currency.
FACTORS AFFECTING HOW MUCH YOU CAN MAKE WITH FOREX TRADING
This refers to the number of people hired by the government of any country. If the number of persons employed increases, this could lead to increase in the country’s productivity. Increase in the country’s productivity could lead to decrease in price of goods and services. Decrease in price leads to deflation, that is little amount of money purchasing large quantity of goods. State of deflation in a country adds value to the country’s currency. Increase in employment rate in a country leads to non devaluation of the country’s currency. You are advised not to buy a currency from a country that its currency has much value, but the one which is devalued at the moment but there is hope that its value will increase in less than no time.
Inflation can be defined as a condition where large amount of money is used to purchase little quantity of goods and services. One is advised to buy currency from a country that is experiencing inflation but with possibility that the inflation will not last long.
Interest rate is the amount of money or services charged from the borrower by the lender for the use of the lenders goods or services. Interest rate is usually expressed in percentage. In a country whose banks charge high interest rate, borrowers are scared away. This could lead to production of less goods and services. Production of less goods and services by a country could trigger the devaluation of the country’s currency by the central bank. Generally one is advised to buy currency with less value at the moment with possibilities that the value will increase. Therefore, you can buy currency from countries with high interest rate.
GROSS DOMESTIC PRODUCT:
Gross domestic product can be defined as the quantity of goods and services a country can render at any particular time. Decrease in Gross domestic product (GDP) leads to inflation; and inflation can lead to the devaluation of a country’s currency.
DURABILITY OF GOODS:
Durability of goods is the time it takes for a particular good to still retains its market value. Goods that are durable reduce the risk of wastage, thereby increasing a country’s quantity of goods and services. Increase in durable goods in a country reduces the risk of inflation with its many advantages to the citizens.
Political factors include the laws of a country, the type of government, norms and values of a particular country, period of war and conflict. Favorable political environment favors a country’s gross domestic product, that is increase quantity of goods and services the citizens of the country can render at a particular time. This leads to decreased risk of inflation.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.