Example Trade

Assume you have a trading account at a broker that requires a 1% margin deposit for every trade. The current quote for EUR/USD is 1.3225/28 and you want to place a market order to buy 1 standard lot of 100,000 Euros at 1.3228, for a total value of US$132,280 (100,000 * $1.3228). The broker requires you to deposit 1% of the total, or $1322.80 to open the trade. At the same time you place a take-profit order at 1.3278, 50 pips above your order price. In taking this trade you expect the Euro to strengthen against the U.S. dollar.

As you expected, the Euro strengthens against the U.S. dollar and you take your profit at 1.3278, closing out the trade. As each pip is worth US$10, your total profit for this trade is $500, for a total return of 38%.

Required Disclaimer: This example is for illustration only. All trades are unique and past results are not necessarily indicative of future performance.

Matterial is taken from http://www.goforex.net/forex-basics.htm

TECHNICAL ANALYSIS: PRICE PATTERNS

Traders vote with their pocketbooks. If they believe a currency pair is
going to move higher, they will buy the currency pair. If they believe a
currency pair is going to move lower, they will sell the currency pair.
When their money is on the line, they will do whatever it takes to be
profitable. Oftentimes the actions of these self-interested traders form
price patterns on the chart.
Price patterns are chart formations that provide insight into what forex
traders are thinking and feeling at various price levels. Learning to
recognize various price patterns gives you an advantage over traders
who are only using fundamentals or technical indicators.
Imagine having the ability to precisely identify trade entry points as a
currency pair breaks out and the ability to accurately project how far a
currency pair is going to move once it has broken out and starting
moving. Price patterns give you this ability.