Once you've acquired a 'lot' (or a little, ha ha ha) of one currency pair, your options on what to do and when become quite limited. In terms of trading to make money, you can either trade the currency pair you have for another one (sell), you can obtain more of the currency pair (buy), or you can do nothing with what you have (hold).
What you do depends on what you speculate will happen with the base currency (the first in the pair) in relation to the quote currency (the second in the pair). For example, if you currently own lots of USD/EUR, then you are tasked to speculate what the US dollar will be doing in regards to the euro.
The rules are simple:
Buy – If you believe that the economy of the base currency (first in the pair) looks like it's going to get stronger in relation to the quote currency (second in the pair), then buy more of the pair.
Sell – Buy – If you believe that the economy of the base currency (first in the pair) looks like it's going to weaken in relation to the quote currency (second in the pair), then sell the pair.
If both currencies are moving in the same direction (both getting strong or both getting weaker), or if you project that absolutely nothing is going to happen, then hold what you have until things start to change.
The beauty of forex is that you are in complete control of your financial destiny. We look forward to hearing your feedback, questions, or suggestions.
