Basics of forex trading

Forex trading, also known as foreign exchange trading or FX trading, it is the process of buying and selling currencies with the goal of making a profit. It’s the largest and most liquid financial market in the world, with over $7 trillion traded daily . 

 It involves various currencies (like EURUSD,GBPJPY,CADCHF and many more ) and commodities (like XAUUSD , XAGUSD) 

1. How forex market works ?

In forex, currencies are traded in pairs. One currency is bought while the other is sold. Common examples include

EUR/USD (Euro/US Dollar)

GBP/JPY (British Pound/Japanese Yen)

XAU/USD (Gold/US Dollar – technically a commodity, but traded similarly)

2. Basics terms to understand forex 

Pip: The smallest price move a currency pair can make, typically 0.0001 for most pairs.

Lot: The size of a trade. A standard lot is 100,000 units of the base currency.

Leverage: Allows you to control a larger trade size with a small amount of money. (E.g., 1:100 leverage means $100 can control $10,000).

Spread: The difference between the buy (ask) and sell (bid) price.

Margin: The amount of capital required to open a trade.

3. How to trade forex ?

A trading platform (like MetaTrader 4 or 5)

A broker to connect you to the market

A trading strategy and proper risk management

NOTE - Before placing any trades learn about fundamental and technical analysis of trading 

Technical analysis - It consist of chart pattern and indicators

Fundamental analysis - It contains news and economic data 

4. Risk warning 

Forex trading offers great potential, but it also comes with high risk. Leverage can magnify profits and losses. That’s why education, practice (via demo accounts), and risk management are essential . don't be greedy to make money overnight just follow the process , focus on your plans , keep sharpening your edge and keep going 

Mastering technicals in trading is somehow easy but mastering pshycology is real battlefield 

5. Conclusion

Forex trading is not a get-rich-quick scheme. It’s a skill that requires patience, discipline, and continuous learning. With the right knowledge and mindset, it can become a powerful financial tool for those who master it.