Learn the fundamentals of currency trading, how the forex market works, and why it's the world's largest financial market with a daily trading volume of $7.5 trillion.
Forex (Foreign Exchange) is the world's largest and most liquid financial market. In this massive marketplace, currencies are bought and sold against each other, with daily trading volume 25 times larger than all stock markets combined.
Forex is the world's largest financial market with $7.5 trillion in daily trading volume.
Markets open Monday-Friday 24 hours, providing uninterrupted trading opportunities worldwide.
Over 180 currencies from around the world are traded in the forex market.
From banks to individual investors, millions of participants trade forex daily.
Different participants trade in the forex market for various purposes. Each group has a different role and impact on the market.
Monetary policy and foreign exchange reserves management
The largest market players, they shape the market through monetary policies and interventions.
Corporate client transactions and proprietary trading
Act as liquidity providers and play a critical role in market operations.
Speculative trading and arbitrage strategies
High-volume traders that can influence market volatility with their large positions.
Individual forex trading and copy trading
Individual traders who have gained access to professional tools through technology.
The most heavily traded and liquid currency pairs. These pairs have low spreads and provide more reliable signals in technical analysis.
Euro / US Dollar
British Pound / US Dollar
US Dollar / Japanese Yen
US Dollar / Swiss Franc
Australian Dollar / US Dollar
US Dollar / Canadian Dollar
New Zealand Dollar / US Dollar
While the forex market is open 24 hours, liquidity and volatility change across different time zones. Here are the main trading sessions:
Lower volatility, JPY pairs active
Highest liquidity, EUR pairs dominant
High volatility, USD pairs active
Highest liquidity and volatility
Fundamental concepts you need to understand before starting forex trading
The smallest unit used to measure price movements in currency pairs. For most pairs, it's the fourth decimal place.
The difference between Ask (buy) and Bid (sell) prices. It's the broker's commission and indicates liquidity levels.
Standard trading unit in forex. Standard lot is 100,000 units, mini lot is 10,000 units, and micro lot is 1,000 units.
Ability to open large positions with small capital. 1:100 leverage means you can open $100,000 position with $1,000.
Minimum amount required in your account to open a position. It's inversely proportional to leverage.
The magnitude and frequency of price movements. Higher volatility means more profit potential but also higher risk.
You've learned the fundamentals. Now are you ready to explore technical analysis, risk management, and trading strategies?