Need massive help- so confused!

[ForexAU]

I am having a very big issue in the very simple fundamentals of Forex trading. I have been watching lots of videos regarding traders solely using price action to influence the times and situations where they go long and short within' their trades. However, I am finding that they are saying that they are making a profit when the line of the time graph progressively goes lower and lower down the chart, instead of going up and up. I find this counter intuitive.

Let's say that you are trading USD:EURO where currency is at 1:1.5. If you where to buy $100 USD is would given you 150 EUR. If the price goes down, to lets say, 1:1.4, then for every $100 USD, you get 140EUR, which is lower than before, hence produces a loss, right?

The only way I can find this to work is if in the currency pair USD:EUR, the trader does not go into the trade with USD, but with EUR instead. For example, USD:EUR=1.1.5. Therefore 100 EURO makes 66.7 USD. If the pair went to 1:1.4, for every 100 EURO, you would get 1/1.4= 71.4 USD. Is this what happens??

I am a little confused ! haha

[chaso]

Here is a decent article that helped me understand price action: http://www.tradingmarkets.com/.site/...tion-77799.cfm

[ChartWizQ]

Good article Chaso

[ForexAU]

yeah its actually great