Forex Fundamentals: A Beginner's Guide to the World's Largest Market

Foreign exchange — forex — is the largest, most liquid market on earth, with more than $7 trillion changing hands every single day. Yet most new traders step in without ever understanding what they're actually trading. This guide fixes that.

What you are really trading Every forex trade is a pair: you buy one currency by selling another. EUR/USD at 1.0850 means one Euro costs 1.0850 US Dollars.

Pips, lots and leverage A pip is the smallest standard price move. Leverage lets you control a large position with a small deposit — and it is the single fastest way new traders blow up accounts.

The three sessions The forex market runs 24/5 across Tokyo, London and New York. The London-New York overlap is when liquidity peaks.