Let's say you want to buy the AUD/USD currency pair. If the Australian dollar (AUD) goes up in value relative to the US dollar (USD) and then you sell it, you will have made a profit. A trader in this example would be buying the AUD and selling the USD at the same time.
For example, if the AUD/USD 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 85 pips (see the chart below).
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| AUD/USD |
Here is another example using the AUD. In this case, we still want to buy the AUD, but let’s do this with the EUR/AUD currency pair. In this instance, we would sell the pair. We would be selling the euro (EUR) and buying the AUD simultaneously. Should the AUD go up relative to the EUR, we would profit as we bought the AUD.
For example, let’s say the merchandiser shorted the USDJPY try at seventy six.28. If the try did if truth be told move down and therefore the merchandiser closed/exited the position at seventy five.81, the profit on the trade would be forty seven pips.
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| USD/JPY |
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