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What Is Forex Trading?

Forex is the global market where currencies are exchanged. You are essentially buying one currency while selling another. Traders make profits by predicting changes in exchange rates caused by market trends, global news, and economic events.

How Forex Trading Works

Currency Pairs

Trade popular pairs such as:

EUR/USD
GBP/JPY

Each pair shows the value relationship between two currencies.

Pips & Lots

A pip is the smallest movement in a currency price.

A lot defines the size of your trade.

Understanding pips and lots helps you calculate trading profits and losses accurately.

Leverage

Leverage allows traders to open larger positions using smaller capital through margin trading. While leverage increases potential profits, it also increases risk and must be used responsibly.

Spread & Fees

The difference between the Bid and Ask price is called the spread. This represents the fee paid to the broker for executing trades.

The 3 Types of Analysis

Technical Analysis

Study charts, indicators, and price patterns to identify market trends and trading opportunities.

Fundamental Analysis

Analyze economic news, interest rate changes, inflation reports, and political developments to understand currency price movements.

Sentiment / Psychology

Successful trading requires emotional control. Managing fear, greed, and discipline is essential for long-term consistency and growth.

How to Start Trading

1. Choose a reliable broker

Select a regulated and trustworthy broker with good support and fair trading conditions.

2. Learn the basics

Understand forex terminology, pairs, chart reading, and indicators.

3. Use a demo account

Practice trading with virtual money before risking real capital.

4. Learn risk management

Never risk more than a small portion of your balance per trade and always use stop-loss protection.