Major currency pairs

In forex, you always trade one currency against another. The first is the base currency, the second is the quote currency.

These are illustrative prices for educational purposes.

Reading a pair

EUR/USD = 1.0842 means: 1 Euro buys 1.0842 US Dollars.

Types of pairs

Majors — Most traded, lowest spreads. Always include USD (EUR/USD, GBP/USD, USD/JPY).

Minors — Don't include USD but use major currencies (EUR/GBP, EUR/JPY).

Exotics — One major + emerging market currency. Higher risk, wider spreads (USD/TRY, EUR/ZAR).

What is a pip?

A pip (Percentage In Point) is the smallest standard price move in a currency pair. For most pairs, it's the 4th decimal place.

So 1.0842 → 1.0843 = moved 1 pip. For USD/JPY, the pip is the 2nd decimal place (e.g. 153.44 → 153.45).

What is the spread?

The spread is the difference between the Bid (sell price) and Ask (buy price). This is the broker's fee — you enter at a small disadvantage.

Tighter spread = cheaper to trade. Majors like EUR/USD typically have very tight spreads (1–2 pips). Exotics can be 20–50 pips wide.

Pip value

On a standard lot (100,000 units), 1 pip = ~$10. On a mini lot (10,000 units), 1 pip = ~$1. On a micro lot (1,000 units), 1 pip = ~$0.10. Beginners should always start with micro lots.

Leverage calculator

Leverage lets you control a large position with a small deposit (margin). It magnifies both profits and losses.

The double edge

With 1:100 leverage: A 1% market move in your favour = 100% return on margin.

But also: A 1% market move against you = 100% loss of margin. Your account can be wiped in minutes.

Recommended for beginners

Start with 1:10 leverage or lower. Many regulators now cap retail leverage at 1:30 for major pairs. Never risk more than 1–2% of your account on a single trade.

Forex is open 24 hours — but not equally active

The market runs across four global sessions. Each has its own character and best pairs to trade.

← Sydney open                                                   New York close →

The London–New York overlap

The 1pm–5pm GMT window (when London and New York are both open) is the most active period of the entire trading week. Spreads are tightest and price moves are largest. Most professional traders focus on this window.

Golden rules for beginners

• 📋
  Always use a demo account first. Practice for at least 3–6 months before risking real money. Most brokers offer free demo accounts with virtual funds.
• 🎯
  Never risk more than 1–2% per trade. If you have $1,000, risk max $10–$20 per trade. This keeps you in the game long enough to learn.
• 🛑
  Always use a stop loss. A stop loss automatically closes your trade if it moves too far against you. Never trade without one.
• 📰
  Watch economic news. Events like interest rate decisions, inflation data, and employment reports cause huge price moves. Check an economic calendar before trading.
• 📓
  Keep a trading journal. Write down every trade — why you entered, what happened, what you learned. It's the fastest way to improve.
• 🧠
  Control your emotions. Fear and greed are your biggest enemies. If you're chasing a loss or feeling over-confident, step away from the screen.
• 🎓
  Start with one pair. Master EUR/USD before touching anything else. It's the most liquid, has the tightest spreads, and has the most learning resources.

Most retail traders lose money

Studies show 70–80% of retail forex traders lose money. This doesn't mean you can't succeed — but it means you must treat this as a skill that takes years to develop, not a quick money scheme.