Learn forex trading step by step.
Understand currency pairs, pips, spreads, leverage, market analysis, trading strategies and risk management through a structured guide created for new forex traders.
Build the right foundation
Understand how the forex market works.
Start with the essential concepts behind currency trading before moving into analysis, strategies or live-market decisions.
What is forex?
Forex is the global market where one currency is exchanged for another. Traders speculate on whether one currency will strengthen or weaken against its paired currency.
- Global decentralized market
- Trades currencies in pairs
- Operates across major financial sessions
Currency pairs
Every forex quote contains a base currency and a quote currency. EUR/USD, for example, shows how many U.S. dollars are required to purchase one euro.
- Major, minor and exotic pairs
- Base and quote currencies
- Liquidity varies by pair
Pips and price movement
A pip is a standard unit used to measure changes in a currency pair. Pip value depends on your position size, account currency and the pair being traded.
- Measures price changes
- Determines profit and loss
- Connected to position size
Spreads and costs
The spread is the difference between the buying and selling price. Brokers may also charge commissions, overnight financing and other account-related fees.
- Bid and ask difference
- Variable or fixed pricing
- Wider during volatility
Leverage and margin
Leverage allows a trader to control a larger market position with a smaller deposit. It increases both potential gains and potential losses.
- Magnifies market exposure
- Requires margin
- Must be used carefully
Trading sessions
Forex activity moves across the Sydney, Tokyo, London and New York sessions. Liquidity and volatility often rise when major sessions overlap.
- Sydney and Tokyo sessions
- London and New York sessions
- Overlaps may increase volatility
Reading a simple EUR/USD quote.
When EUR/USD is quoted at 1.0850, one euro is worth 1.0850 U.S. dollars. If the price rises, the euro has strengthened relative to the dollar. If it falls, the euro has weakened.
Explore live charts for gold, major currency pairs, indices and digital assets on the ForexInfluence market page.
Learn how traders analyse forex markets.
Forex traders generally combine technical analysis with fundamental analysis to understand price behaviour, economic conditions and potential market risk.
Technical analysis
Technical analysis studies price charts, market trends, support and resistance levels, chart patterns and indicators to understand how a market has behaved.
- Identify bullish, bearish and ranging conditions
- Mark support and resistance price zones
- Use indicators to study momentum and volatility
- Review multiple chart timeframes
A trader may look for an uptrend, wait for price to return toward support and then assess whether momentum is recovering.
Fundamental analysis
Fundamental analysis studies economic data, central-bank policy, inflation, employment, political conditions and market expectations that may influence currency demand.
- Follow central-bank interest-rate decisions
- Review inflation and employment reports
- Monitor economic growth and market sentiment
- Consider geopolitical and risk events
Expectations of higher interest rates may support a currency, while weaker economic data may reduce demand for it.
Combine market context with chart structure.
Analysis does not predict the market with certainty. Its purpose is to build a structured trading idea, identify invalidation points and prepare risk controls before entering a position.
Check market conditions
Determine whether the market is trending, ranging or moving through unusually high volatility.
Review major events
Check the economic calendar for interest-rate decisions, inflation releases and other high-impact events.
Mark key price levels
Identify support, resistance, trend structure and the price level that would invalidate the trading idea.
Define risk first
Set the position size, stop-loss level and acceptable loss before considering the potential reward.
Use the ForexInfluence live market page to explore charts, market news, technical sentiment and the economic calendar.