It is a question easy to answer ..When you trade as a commodity, the profit achieved when you buy this item at one price and sell at a higher price.That is, we can not make a profit only if the price of a commodity to sell us more than our purchase price to them.On the basis of a simple equation: profit = sale price - purchase priceWe buy at one price and sell at a higher price .. Thus achieved a profit.Must before we buy a commodity for trading to expect the most to make sure that the price will rise.If we confirm that the price of a commodity will rise after a period of time, we buy and wait until the price rises really high price and then sell them.So we can not achieve the profit only in emerging markets, ie markets where prices are rising day after day.We control the movement of prices and when we expect that the price of a commodity has become a rising that is, they rise day after day, we buy and then wait until the price rises already Venabieha and we get a profit.But what if we expected that the price of a commodity will decline and will not rise?What if we expected that car prices will fall in the coming days and will not go up?Of course, it would be foolish to buy a car now, because we find that the price will fall after days, if we sold we will suffer from the loss.If the price of the car is $ 10,000, but we expect in the coming days that the price will drop to $ 8,000, it would be foolish to buy it at $ 10,000 because we find that the price became $ 8000 a few days after, if we sold at that price we will suffer a loss of $ 2000.If .. We can not begin to buy only when we expect that prices will rise and markets on the rise.This issue of the obvious might wonder why stress it?This is because we bear markets in any market with low prices we can also achieve a profit ..!!How so?Imagine that you have a car equal to the market price now is $ 10,000If car prices and a drop in your car after a few days the price will drop to $ 8,000, how can this be profitable?Simply will sell your car now, before the low price at $ 10,000 and put in your pocket this amount, wait until the price falls to $ 8,000 and then you buy at this price.What result?The result is that your car returned to you along with the profit of $ 2000.Has sold the amount of $ 10,000, then prepared to buy any amount of $ 8,000 that you prepared your car and with a profit of $ 2000 ..!!This means that you are able to profit from declining market completely Kthakiqk to profit from the emerging market.With one difference ..You are in the emerging market (ie, where prices are rising day after day) began the deal to buy and then sell Onhiha.I bought the car at $ 10,000 and then sold it at $ 12,000 and made a profit.The bearish market has begun to sell the deal then Onhiha purchased.I sold the car at $ 10,000 and bought again at $ 8,000 and made a profit.In the case of emerging market: The purchase price is less than the selling price.In the case of the falling market: The purchase price is also less than the selling price.But I disagree is the arrangement of the deal.In the rookie started the purchase and sale of finished, in the market started declining and the sale of finished buying.If it does not matter that the prices are high or low to make a profit trading.It is important to have your prospect of the market is correct.If predicted that prices will rise first and then buy the item will sell when it rises really.If the forecast that prices will fall first and then sell the item you buy when they go down already.In both cases, the purchase price will be less than the sale price, It is no different but the order to do the deal.It is interesting that in all financial markets, called the term of the market Bullish Bearish and bullish for the market downward, in the financial markets reflects the Bull for the forces of demand, the forces that drive purchase prices to rise and reflects the Bear for the forces of supply, sales force, which drive prices lower.When the demand for a commodity to be great and a lot of traders willing to buy this commodity price of this commodity will rise quickly and said that the market is controlled by the bulls who are paying the price rise.When the supply is a commodity that big and have a lot of traders willing to sell the item price will drop quickly and said that the market is controlled by the bears who are paying the price decline.The market for any commodity is an arena for conflict between the bulls and the bears beat the bulls if the result was higher prices and if the Bears beat the result was lower prices.What we have said is one of the most forms of expression in all financial markets, and often you will meet this expression is interesting in different markets.
Let us take an example: imagine that there is a kind of wood per ton of it now is equal to $ 2,000, but you and your studies of the market reached a conviction that, after a week will increase the price per ton of plywood to $ 3000. How can you make a profit?Answer: You will pay the amount of $ 2000 and buy tons of this wood and wait for your prospect if approved will increase the price per ton to $ 3000 then sell what you have new price and has thus made a profit equal to $ 1,000 from this deal. (Sale price - purchase price).I started buying and selling finished.Example 2: Imagine that the same type of wood, which is equal to a ton of it now $ 2,000, but you from your studies of the market reached the conviction that after a period of time will decrease the price per ton and up to $ 1000, how will profit?Answer: This will sell a ton in the market now at $ 2000 and will be in your pocket $ 2000, when the price drops to $ 1000 per ton Ststraeh again at $ 1000. Thus, the wood is up to you and his profit $ 1000.You might ask an important question ..How do I sell wood and I do not I own?Well .. Stguetrdah ..When reached to the conclusion that the price of wood will drop after a period of time, will go to a timber merchants and ask him to lend tons of wood to bring it back to him after a week, for example ..If approved would take tons of wood, which borrowed and run it to market and sell them at $ 2000, now you have $ 2000 but the demands to return tons of wood to a trader who are lending you to him.Well wait for some time and when the price drops to $ 1000 per ton as expected will go to the market and buy tons of wood, the amount of $ 1,000 and then return it to the dealer, leaving you $ 1000 net the gain for you.What if the price of wood instead of going down?If we assume that the price per ton was $ 3,000, meaning that you be able to re-ton, who borrowed must be bought for a price of $ 3,000 but does not have to have only $ 2000, if you must add from your pocket $ 1000 to compensate for the difference to be able to re-wood, which borrowed.When sales start will be all I have is that prices fall so you can purchase at a price below the selling price.As we have said that the profit does not take place unless the sale price is higher than the purchase price, and Any arrangements for this deal is important is that in the end of the deal to be sold by the price at which the item is higher than the price you bought it.From this example shows you that the profit can be achieved in the emerging market and the market downward. The important thing is to believe your prospect.In the financial markets LONG term called when you start the deal to buy The term SHORT when you start to sell the deal.You can think of that means LONG SHORT purchase and sale of means.Why do not we apply what we have learned is now trading on a margin?Know that there is no difference between a commodity that trades in the traditional manner and that trading on a margin only in the margin you will pay only a fraction of the value of the item which Sttajer.To go back to the example of the previous car and we'll trading margin in the case of emerging market and the market downward.Remember that we are dealing with the agency will deduct the amount of $ 1000 margin for every car user decide to trade it, and remember that our account with the company is $ 3000.
In the case of emerging marketSuppose that the price per car is $ 10,000 and assume that we, through our follow-up to the car market and have come to the conclusion that car prices would rise in the coming period, we will consider whether to buy a car in the hope that we can sell at a higher price later.Will buy 1 lot of agency cars we will buy any car, and one where the Lout = car worth $ 10,000.The agency will auto deduct $ 1,000 from our account user retrieves the margin after the completion of the process, and will remain in our account $ 2,000, a margin available to the maximum amount that can be lost in this deal.Suppose that after our purchase of the car down car prices to $ 9000, if we sell the car at the current rate we will need to add $ 1,000 from Jebena to complete the value of the car which we purchased from the agency at $ 10,000, deducted Agency this amount from our account to make up the difference.But we will not sell and we will wait ..Yes .. Suppose that prices have risen rapidly and the price of car $ 12,000.If we sell the car at the current rate we will be able to pay the full value of the car will remain $ 2,000 and won two of the deal.We will decide the deal Finish Snomr Agency to sell the car at $ 12,000, the agency will implement it and deducted the value of the car are being urged by a $ 10,000 and the remaining amount of $ 2,000 as profit will it add to our account has yet to re-margin the user.Would be to have our account = $ 5000.Thus, the profit that we have achieved:Profit = selling price - purchase price
= 12000-10000 = $ 2,000
In the case of the falling marketSuppose that the price of the car now = $ 10,000, but we and our follow-up of the market we have to believe that car prices will fall in the coming period.We will consider the sale of a car at the current price for the re-purchase them at a lower price later.Of course, we have very car now, so we'll Bagtradha of agency Snomrha cars and sell them immediately in the market at the current $ 10,000.Agency will implement it at our expense and deducted from the $ 1,000 margin the user. Whether we sold or bought the car we started and we are demanding a deal to pay the full value of the car in case of purchase or return the car in case of a sale.Will remain in our account the amount of $ 2,000 available margin, and we are now demanding the return of the car that Aguetrdhanaha.If we suppose to sell us the car after car prices and the price of car = $ 11,000.This means that if we decided to buy a car at the current We will hold the added $ 1,000 of Jebena where we sold the car the amount of $ 10,000 and the car now = $ 11,000 so that we can return to the Agency, we need to add $ 1000, will be deducted this amount from our account with the agency if we decided to actually purchase.But we will not do .. We will wait ..Yes, car prices have fallen and the price of car = $ 8,000, which, if we decided to buy a car now to bring her back to the Agency will pay the amount of $ 8,000 and still have $ 2,000 of the price that we sold the car in which the gain to us.We will do this and Snomr Agency to buy a car, it will be implemented and the company will pay about $ 8000 will remain $ 2,000 will be added to our account has yet to recover the user and the margin will be at our expense = $ 5,000Thus, the profit that we have achieved:Profit = selling price - purchase price
$ 10,000 = $ --8,000 = $ 2,000You see, in the trading margin in the traditional manner Kalmtajerp can always make a profit in bullish and bearish market and the important thing is to believe our expectations.
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