Forex trading (foreign exchange trading) is the process of buying and selling currencies on the global market. It is the largest and most liquid financial market in the world, with daily trading volume exceeding $7 trillion (as of 2024).
Currencies are traded in pairs (e.g., EUR/USD, GBP/JPY).
Traders speculate on whether one currency will rise or fall in value against another.
For example,
if you believe the Euro will rise against the US Dollar, you buy EUR/USD.
Term Meaning
Pip The smallest price movement in a currency pair (usually 0.0001).
Leverage Allows you to trade larger positions with a smaller amount of capital.
Spread The difference between the bid and ask price (broker’s fee).
Lot Size The amount of currency you trade (1 lot = 100,000 units standard).
Margin The amount required to open and maintain a trade.
Day Trading:
Open and close trades within a day.
Swing Trading :
Hold trades for days or weeks.
Scalping :
Make multiple small trades for quick profits.
Automated Trading:
Using Expert Advisors (EAs) to trade automatically.
EUR/USD
USD/JPY
GBP/USD
USD/CHF
AUD/USD