Decentralized Market
Forex does not operate from one central exchange. Participants transact through an interconnected global financial network.
Build your understanding of forex from the ground up. Learn how currency pairs, pips, lots, leverage, spreads, regulation and trading accounts work before making decisions in live markets.
Before learning strategies or indicators, understand the structure behind the market: who participates, when currencies trade and how exchange rates are quoted.
Foreign exchange trading involves exchanging one currency for another. Prices are therefore quoted as currency pairs, with movements representing changes in the relative value between those two currencies.
Forex does not operate from one central exchange. Participants transact through an interconnected global financial network.
Forex trading moves through major global sessions during the business week, with activity passing between Asia, Europe and North America.
Every forex quote contains a base currency and a quote currency. The displayed price tells you their relative exchange value.
Traders participate for speculation, portfolio exposure, hedging and access to currency movements across global economies.
Pips, lot size, leverage and spread directly affect how a forex position behaves. Use the educational example below to see how these concepts connect.
A pip is a standard unit used to describe changes in a forex exchange rate. For many major pairs, one pip equals 0.0001.
Lot size determines the amount of currency represented by a position and therefore influences the monetary value of each pip.
Leverage allows a trader to control a larger market position with less margin, but it also magnifies the impact of both gains and losses.
The spread is the difference between the bid and ask prices. It represents one of the costs a position may need to overcome.
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