Introduction to Forex Trading for Complete Beginners
Katy Spark
Nov 23, 2025
Welcome to forex trading! This guide will introduce you to the fundamentals of the world's largest financial market, where over $6 trillion changes hands daily.
What is Forex Trading?
Forex (foreign exchange) trading involves buying one currency while selling another. Currencies are traded in pairs, like EUR/USD (Euro vs US Dollar), where you're speculating on whether one currency will strengthen or weaken against the other.
Understanding Currency Pairs
Base and Quote Currency
In EUR/USD = 1.0850:
- EUR (Base): The currency you're buying/selling
- USD (Quote): The currency used to price the base
- 1.0850: It costs $1.0850 to buy €1
Major Pairs
The most traded pairs include: EUR/USD, USD/JPY, GBP/USD, USD/CHF, AUD/USD, USD/CAD
Key Concepts
Pips
A pip is the smallest price move, typically the fourth decimal place. If EUR/USD moves from 1.0850 to 1.0851, that's one pip.
Lots
- Standard lot: 100,000 units
- Mini lot: 10,000 units
- Micro lot: 1,000 units
Leverage
Forex brokers offer leverage, allowing you to control larger positions with smaller capital. While this magnifies profits, it equally magnifies losses.
Getting Started
- Learn the basics (you're doing this!)
- Open a demo account to practice
- Develop a simple trading strategy
- Master risk management
- Start small with a funded account
Katy Spark
Content Writer at PulseMarkets
Expert in forex trading, market analysis, and financial API integration. Helping traders and developers make better decisions with data.