Introduction to Forex Trading

Published: June 2025 · Author: ForexClose Research Team

What is the Forex Market?

Forex (Foreign Exchange) is the global marketplace where currencies are bought and sold. It is the largest and most liquid financial market in the world, with trillions of dollars traded daily.

Common currency pairs include:

• EUR/USD — Euro vs US Dollar
• GBP/USD — British Pound vs US Dollar
• USD/JPY — US Dollar vs Japanese Yen
• AUD/USD — Australian Dollar vs US Dollar

Why Trade Forex?

• Open 24 hours per day, 5 days per week
• Highly liquid and efficient execution
• Low transaction costs
• Opportunities in both rising and falling markets

Basic Forex Concepts

Currency Pairs

When trading Forex, you always trade one currency against another. For example, buying EUR/USD means buying euros and selling dollars.

Pips

A pip is the smallest unit of price movement in most currency pairs. It is typically the fourth decimal place (0.0001).

Lots

A standard lot is 100,000 units of the base currency. Many brokers also offer mini, micro and nano lots to help beginners trade smaller sizes.

Leverage

Leverage allows you to control a large position with a smaller amount of capital. While powerful, it increases both potential profit and risk.

How Forex Trading Works

1. You choose a currency pair.
2. You decide whether you expect price to rise (go long) or fall (go short).
3. Your trade’s result depends on how price moves relative to your entry.

Types of Forex Traders

• Scalpers: trade very short‑term price moves
• Day traders: close positions within the same day
• Swing traders: hold trades for days or weeks
• Position traders: long‑term trend traders

Essential Skills for New Traders

• Understanding market structure
• Technical analysis
• Risk management
• Emotional discipline
• Trading journal and review process

Common Mistakes to Avoid

• Using too much leverage
• Over‑trading
• Trading without a plan
• Ignoring stop‑losses
• Chasing the market emotionally

How to Learn Faster

The fastest way to gain experience is through structured training with real market data — not by guessing and hoping.

At ForexClose, we specialize in accelerated Forex learning tools that compress years of experience into months by allowing you to practice on historical price data efficiently.