At its most basic level, all you are doing is placing a trade on a currency hoping it is going to go up in price. For example you might think that the Euro is going to go up in value against the Australian dollar then you could place a trade to buy the EUR/AUD currency pair. If the Euro subsequently rises you would make a profit, if it drops you would have a loss. If you think that the Euro is going to go down you could place a trade that would benefit from that move too. This can all be done very easily in an on-line trading platform.
Forex traders study country fundamentals and market news along with price charts to help determine the direction that the currency might go. While this may seem complicated at first, the more experienced traders tend to focus on simplicity, as they realize that their success is more about their trading psychology rather than a fancy entry.
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