Scribd
Upload
0 views

forex intro

Forex trading involves exchanging national currencies in a highly liquid market, operating 24/5 with over $7 trillion traded daily. Currencies are traded in pairs, with major, minor, and exotic pairs available, and understanding key terms like pips, spread, leverage, and lot sizes is essential for trading. The market operates globally without a central exchange, with peak trading times during the overlap of London and New York sessions.

Uploaded by

tjforex6
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
0 views

forex intro

Forex trading involves exchanging national currencies in a highly liquid market, operating 24/5 with over $7 trillion traded daily. Currencies are traded in pairs, with major, minor, and exotic pairs available, and understanding key terms like pips, spread, leverage, and lot sizes is essential for trading. The market operates globally without a central exchange, with peak trading times during the overlap of London and New York sessions.

Uploaded by

tjforex6
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Lesson 1: What Is Forex Trading?

Forex = Foreign Exchange

Forex (or FX) is the global marketplace for exchanging one national currency
for another. It’s the most liquid financial market in the world, with over $7
trillion traded daily.

Why Trade Forex?

Open 24 hours, 5 days a week

High liquidity (easy to enter/exit trades)

Low capital needed to start (because of leverage)

Opportunities in both rising and falling markets

Lesson 2: Currency Pairs

Currencies are always traded in pairs. You're buying one currency and selling
another.

Example: EUR/USD

EUR (Euro) is the base currency

USD (US Dollar) is the quote currency

If EUR/USD = 1.1000, it means 1 Euro = 1.10 USD

Types of Pairs:

1. Major Pairs – Most traded, high liquidity (e.g., EUR/USD, GBP/USD, USD/JPY)

2. Minor Pairs – Don’t include USD (e.g., EUR/GBP, EUR/JPY)

3. Exotic Pairs – One major currency + one emerging (e.g., USD/TRY,


EUR/ZAR)

Lesson 3: How the Forex Market Works


Decentralized Market

Unlike stocks, there's no central exchange. It operates globally through:

Banks

Hedge funds

Retail traders (you)

Market Hours

The Forex market is open 24 hours a day (Mon–Fri), split into four main
sessions:

Sydney: 10 PM – 7 AM (GMT)

Tokyo: 12 AM – 9 AM

London: 8 AM – 5 PM

New York: 1 PM – 10 PM

Best times to trade? London & New York overlap (1–5 PM GMT), when
volatility is highest.

Quick Task for You:

1. Download a free trading app like MetaTrader 4 (MT4) or TradingView

2. Search and view the EUR/USD chart

3. Observe how prices move in real-time

Lesson 4 : Basic Forex Terms

Understanding these terms is critical to grasping how trades work and how
profits/losses are calculated.

1.Pips (Percentage in Point)

A pip is the smallest unit of price movement in a currency pair.

Most pairs are quoted to 4 decimal places

Example: EUR/USD = 1.1050


If price moves to 1.1055, it moved 5 pips

Exception: Pairs with JPY (like USD/JPY) are quoted to 2 decimal places

110.25 to 110.30 = 5 pips

 Pips help measure how much a pair has moved.

2. Spread

The spread is the difference between the Bid price and the Ask price.

Example:

Bid = 1.1050

Ask = 1.1052

Spread = 2 pips

 Brokers earn money through the spread. Tighter spreads = cheaper


trading.

3. Leverage

Leverage lets you control a larger position with a smaller deposit.

Example:

You have $100

Leverage 1:100

You can control $10,000 worth of currency

Caution: High leverage = high risk. You can lose more than you invest if not
managed properly.

4. Lot Sizes

In Forex, trades are measured in lots:


 Most beginners start with micro or mini lots.

5. Long vs Short

Long = You buy the base currency (expecting price to go up)

Short = You sell the base currency (expecting price to go down)

Quick Recap Task:

Answer these to check your understanding:

1. If EUR/USD moves from 1.1000 to 1.1050, how many pips is that?


2. If a broker shows EUR/USD as 1.1052 / 1.1055, what’s the spread?
3. If you trade 1 mini lot, how much is each pip worth?

You might also like