New to the markets? Start here. Learn what forex is, how a trade actually works, and the core concepts every beginner needs — in plain English.
Forex — short for foreign exchange — is the global marketplace where currencies are bought and sold. It's the largest and most liquid financial market in the world, open 24 hours a day, five days a week.
Currencies are always traded in pairs, like EUR/USD or GBP/JPY. When you trade a pair, you're buying one currency while selling the other — betting on how their value moves relative to each other.
Get comfortable with these six ideas and you'll understand most of what happens on a trading screen.
Every trade involves two currencies — the base (first) and the quote (second). The price shows how much quote currency one unit of base is worth.
A pip is the smallest standard price move, usually the 4th decimal place. It's how traders measure gains and losses on a pair.
The gap between the bid (sell) and ask (buy) price. A tighter spread means a lower cost to enter a trade.
Trade size is measured in lots. One standard lot is 100,000 units; mini (0.1) and micro (0.01) lots let you trade smaller.
Leverage lets you control a larger position with a small deposit (margin). It magnifies profits — and losses — so use it carefully.
Go long (buy) if you expect the price to rise, or short (sell) if you expect it to fall. You can profit either way.
You think the euro will strengthen against the dollar, so you go long on EUR/USD with one standard lot. Each pip ≈ $10, so a 50-pip move ≈ $500.
Open 1 lot at the ask price
The euro strengthens as expected
1.0896 − 1.0846
50 pips × $10 per pip
Illustrative example. Had the price fallen instead, you would have made a loss in the same way.
A pip is the 4th decimal place on most pairs (0.0001). On JPY pairs like USD/JPY it's the 2nd decimal (0.01). The tiny 5th decimal is a pipette — a tenth of a pip.
How much each pip is worth depends on your lot size. The bigger your position, the more each pip is worth — in both directions.
| Lot size | Units | Value per pip* |
|---|---|---|
| 1.00 (standard) | 100,000 | $10.00 |
| 0.10 (mini) | 10,000 | $1.00 |
| 0.01 (micro) | 1,000 | $0.10 |
Leverage lets you control a large position with a small deposit called margin. Required margin = position size ÷ leverage. It magnifies profit and loss equally.
Position size at 1.0846
ProPrimeFX forex majors
$108,460 ÷ 500
$217 controls $108,460 of exposure
Funds still available to open new trades — your equity minus the margin already in use.
Equity ÷ used margin, shown as a %. The higher it is, the healthier your account.
A warning at 100% margin level that your equity is getting close to the margin needed.
If the level keeps falling, positions are auto-closed (ProPrimeFX: Standard 20%, Pro 30%, ECN 50%).
Every trade should have a plan. A stop loss automatically closes your trade at a set level to cap your loss. A take profit closes it once your target is reached.
The market runs around the clock through the Sydney, Tokyo, London and New York sessions.
Trillions change hands daily, so major pairs are easy to enter and exit at tight spreads.
Go long or short — there's an opportunity whether the market is rising or falling.
Leverage lets you access larger positions with a smaller deposit, though it raises risk too.
Open your account in minutes — or start on a free demo to practise risk-free.
Add funds with a convenient payment method when you're ready to trade live.
Place your first trade on 150+ instruments with the TenaxCode platform.
Practise risk-free on a demo account, then go live when you're ready — all on the TenaxCode platform.