Currency Pairs
Trade one currency against another. If you expect EUR to rise vs USD, buy EUR/USD.
What is FOREX
Forex Basics
What is Foreign Exchange?
Foreign exchange (Forex or FX) is the global marketplace where currencies are exchanged. Any time you convert one currency into another — for travel, online purchases, or business — you interact with the forex market. Unlike stock exchanges, FX is decentralized and runs electronically over-the-counter.
The FX market operates 24 hours a day, five days a week, and is the world’s most liquid market by volume. Its scale and round-the-clock access make it attractive for both hedging and speculation.
With TradeFlix, you can participate via copy trading: discover experienced strategy providers, mirror their trades automatically, and manage your risk using allocation and stop settings — all while remaining in control.
Market Structure
What is the Forex Market?
The FX market is a decentralized over‑the‑counter network where banks, institutions, brokers, and traders buy and sell currencies in pairs (for example, EUR/USD). There is no single exchange; instead, prices are streamed by liquidity providers across the globe, with quotes updating multiple times per second.
Price is influenced by central bank policy (interest rates, QE/QT), macroeconomic data (inflation, employment, GDP), and market sentiment (risk‑on/risk‑off). Liquidity and volatility vary by session.
New York
Tokyo
London
Getting Started
How does Forex Trading Work?
Forex trading involves buying one currency while simultaneously selling another. Pairs are quoted as base/quote (EUR/USD). If you expect the euro to strengthen versus the US dollar, you would buy EUR/USD; if you expect it to weaken, you would sell. Spreads (the difference between bid and ask) are a key cost to consider.
Example: if EUR/USD is 1.1000/1.1002, buying at 1.1002 means you pay the ask. A move to 1.1012 equals +10 pips. With leverage, a smaller deposit (margin) controls a larger position size — powerful but risky, so robust risk management is essential (position sizing, stops, and discipline).
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Bid/Ask Pricing
Two prices: bid and ask. The spread between them is a key trading cost.
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Leverage & Margin
Control larger exposure with smaller capital. Use leverage responsibly.
FX Pair Structure
Prices are quoted as base/quote (for example, EUR/USD). Buying the pair means buying the base currency and selling the quote currency.
Types of Currency Pairs
- Majors: Seven popular pairs that include USD on one side (e.g., EUR/USD, GBP/USD, USD/JPY).
- Minors (Crosses): Pairs that do not include USD (e.g., EUR/GBP, AUD/JPY, EUR/JPY).
- Exotics: One major currency paired with an emerging‑market currency (e.g., USD/TRY, USD/ZAR).
Key Terms
Forex Trading Terminology
- Spread: The difference between bid and ask prices.
- Pip: The smallest price movement for a currency pair.
- Lot: Standardized trade size; mini and micro lots are smaller.
- Long/Short: Buy to benefit from rising prices, sell to benefit from falling prices.
- Stop Loss/Take Profit: Risk controls to automatically close trades.
- Margin: Capital required to open a leveraged position.
- Margin Level: Ratio of equity to used margin; higher is healthier.
- Position: Exposure created once a trade is open until it’s closed.
- Swap/Rollover: Overnight financing credit/debit applied to held positions.
Who Trades?
The Main Forex Market Participants
Major Banks & Liquidity Providers
Sit at the top of the interbank market, streaming quotes and facilitating large currency flows across venues.
Hedge Funds & Asset Managers
Seek alpha, hedge exposures, and deploy systematic or discretionary strategies across multiple timeframes.
Corporations
Manage currency risk from global revenues, costs, and financing; often transact via relationship banks.
Retail Traders
Participate via broker platforms and copy trading networks like TradeFlix, with tools to manage risk.
Market Types
Different FX Markets
Forwards
Contracts to exchange currencies at a future date and price.
Price Drivers
What Moves the Forex Markets?
- Interest Rates: Central bank policy and rate expectations.
- Economic Data: Inflation, employment, GDP, and trade balances.
- Risk Sentiment: Geopolitics, equities, commodities, and overall market mood.
- Liquidity: Trading sessions (Asia, Europe, US) and holidays impact activity.
Opportunities
Why Trade Forex?
High Liquidity: Tight spreads and round-the-clock access.
Diverse Strategies: Trend, mean reversion, breakout, and more.
Leverage: Amplify exposure with careful risk control.
Portfolio Diversification: Currencies respond differently than stocks and bonds.
Pros
- Low trading costs (spreads), decentralized market, 24/5 accessibility
- High liquidity, ease of entering/exiting positions
Cons
- Leverage can amplify losses if unmanaged
- Volatility around economic events can be significant
TradeFlix Advantage
Why Trade Forex with TradeFlix?
Insights
Transparency by Design
View track records, metrics, and style notes so you can pick strategies that align with your goals.
Risk
Built‑in Risk Controls
Define per‑strategy caps, use stop‑copy rules, and review analytics to manage downside.
FAQ
FAQs on What is Forex.
Forex is the global marketplace where national currencies are exchanged against one another based on their relative values.
Forex operates with currency pairs. You buy or sell a pair depending on whether you expect the base currency to strengthen or weaken against the quote currency.
Yes — regulation varies by country. Always use a broker regulated by reputable authorities and maintain strong risk controls.
They can be. Economic data, geopolitics and shifting sentiment can create fast moves — both opportunity and risk.
It can be, but returns are never guaranteed. Results depend on knowledge, strategy quality and disciplined risk management.
Primarily via the bid/ask spread and, in some cases, explicit commissions or overnight financing (swap) charges.
