Forex Trading: Markets, Pairs & How to Start (2026)

Forex: The financial market at the heart of today’s financial news is forex. Its daily forex trading volume is estimated at around $7.5 trillion, according to the Bank for International Settlements’ 2022 triennial survey. This platform offers you several currency pairs that you can invest in at any time. Discover everything there is to know about forex here.

Forex: What Is It?

Definition – In English, forex stands for Foreign Exchange Market: a global over-the-counter market where international currency pairs are exchanged at a price known in advance. In addition, forex is a platform that provides enormous services to:

• Individuals;
• businesses; and
• central banks.

What is forex used for? – It makes it possible to convert funds from one currency to another. From its earliest days, forex has been a financial market that answers the practical needs of companies looking for foreign currency to carry out their business on a global scale. It also allows investors to exchange their currency before setting off on a trip.

Forex on the financial market – Forex EUR/USD is also known as the currency market, the FX exchange market or currency trading. It is the largest financial market in the world and it is decentralized. On forex you are not dealing with exchanges such as:

• the stock market and;
• the index market.

What Is Forex Trading?

Forex trading is an operation that allows you to take a position on the fluctuation and volatility of currency prices.

On the forex analysis platform, traders aim to profit from the volatility of currency prices, whether they move up or down. To generate profits, they buy and sell currencies against one another based on economic or chart analysis.

Who Trades Forex?

• Central banks;
• Hedge funds;
• Experienced investors and retail traders;
• Traditional banks;
• Brokers;
• Investment funds;
• Governments.

Currency Pairs on the Forex Market

As a forex trader or forex investor, you should know that trading on the forex market is based on buying a reference currency and then selling a quote currency. This is why currency prices are constantly quoted in pairs. As a rule, forex brokers classify currency pairs as follows:

• Major currency pairs: These all contain the US dollar, either as their base currency or as their quote currency. These currency pairs come with the cheapest spreads and the highest trading volumes. For reference, major pairs include: EUR/USD, USD/JPY, GBP/USD and USD/CHF.
• Minor currency pairs: Some call them cross rates and others cross pairs. They are usually made up of all the major currencies except the US dollar. This category includes the following currencies: EUR/GBP, EUR/CHF and GBP/JPY.
• Exotic currency pairs: These combine a major currency with a minor currency, or with the currency of an emerging economy. Examples in this category include: USD/PLN, GBP/MXN and EUR/CZK.
• Regional currency pairs: This category is grouped by geographic regions, such as Scandinavia or Oceania. Pairs here include: EUR/NOK, AUD/NZD and AUD/SGD.

Major Currency Pairs: Rates and Guides

Here are the pairs most closely watched by retail traders, with their market nickname and what drives their rate. Each guide features the live chart, the most active trading hours and the things to know before you trade.

The Base Currency and the Quote Currency

In a forex pair, the first currency quoted is the base currency. The second currency quoted is the quote currency. Note that within a currency pair, each currency is represented by 3 letters. The first two letters indicate the country or region, and the last letter indicates the currency. For reference, in the GBP/USD pair, the first two letters indicate that GBP stands for buying the British pound, and USD for selling the US dollar.

The PIP

In English, the term PIP stands for “point in percentage”. On the forex market, the PIP is the unit of measurement used to indicate the smallest change in the quotation of a currency pair. It refers to the fourth decimal place, but for Japanese yen forex pairs the PIP refers to the second decimal place. To put it simply, when the EUR/USD pair moves from 1.1000 to 1.1001, the pair is said to have risen by 1 PIP.

The Lot

In forex trading, the lot is the unit of value used to measure the size of a single transaction. In other words, the amount of your investment in the forex market grows with the number of lots you trade. On forex, a single lot is worth 100,000 units of the base currency, whether that is the EUR, USD, GBP, etc. Note that there are generally three lot categories, namely:

• the standard lot;
• the mini-lot; and
• the micro-lot.

How much money do you need to trade forex? The lot size you choose largely determines the capital required. You should also know that the notion of a lot varies depending on the following instruments:

• The currency pair traded;
• The stock index;
• The commodity traded; and
• The shares traded.

Margin and Leverage

Margin, also called cover, is the amount the investor puts on the market when intending to open and maintain a position that is already open on the stock market. This sum is released when the transaction is closed.

Leverage, for its part, is a financial instrument that helps you gain exposure to sizable currency positions without committing the full amount of the open position on the forex market. Note that on forex, leverage varies depending on the derivative product you decide to trade. That said, when you opt to buy the following products:

• Turbo24s;
• barrier products; and
• vanilla options.

The initial sum of your transaction — in other words, the price of the Turbo24 or the option premium — matches your maximum risk.

How to Trade Forex?

What about forex trading? – A forex trading operation is characterized by buying one currency followed by the instant sale of another. The goal of the forex trader is to profit from price movements in the market, whether up or down. Forex is quite complex. To master how it works, you can practice on a forex simulator.

Most of the operations carried out on forex used to be managed by brokers. With the advent of online trading, you can now manage your own operations using the following products:

• Turbo24s;
• options; and
• CFDs.

What Is the Forex Market?

The forex financial market is run by a vast international network of banks. This network is spread across 4 major trading centers that cover different time zones, namely:

• London;
• New York;
• Sydney; and
• Tokyo.

Unlike stock and commodity trading, which take place on a single exchange, forex trading is based on over-the-counter transactions and trades 24 hours a day. In other words, transactions are concluded directly between two parties. The market is accessible from anywhere, to the point that forex Morocco and forex Tunisia are also available.

What Influences the Forex Market?

• Central banks: You should know that the supply of currencies is under the control of central banks. Their various measures can therefore have a huge impact on the forex rate.
• Economic data: Note that commercial banks and investors tend to favor emerging economies. As a result, good or bad economic news hitting any part of the globe can push demand for a currency up or down. Currencies therefore generally depend on the economic health of each region of the world.
• Market sentiment: Market sentiment often refers to the reaction to news and can play a leading role in currency prices. When a group of investors or traders believes a currency will move in a given direction, they open a position in that direction; when enough people take that position, it prompts other investors and traders looking to invest in forex to join the same movement.

Forex Trading with Turbo24

Turbo24 definition – The Turbo24 is one of the financial products that helps you place funds on the forex financial market with leverage, across a wide range of financial assets, namely:

• Indices;
• Stocks;
• Commodities;
• etc.

What affects the cost of a Turbo24? – Note that the cost of a single Turbo24 is derived from the price of an underlying financial asset, such as:

• A stock index; or
• A currency pair, and follows its volatility.

Turbo24s are traded on the Spectrum venue, an alternative trading venue also known as an MTF or Multilateral Trading Facility. You can access this venue through the IG platform.

Going Further: Forex Trading in Practice

The following sections take a closer look at the practice of forex trading: choosing a broker, platforms, automated trading and strategies — the complete guide, from beginner to seasoned trader.

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Best Forex Trading Broker for Beginners

Thanks to its social trading and copy-trading options, which appeal to everyone, Vantage is very popular — no doubt because of its simplicity and ease of access. The platform welcomes beginner investors and forex trading experts alike.

Vantage has managed to combine ease of use for novices with the development of features that experienced traders need. What is more, for quick access to the site, it offers two options. Its users can consult the information they need from their computers as well as their smartphones.

The Vantage brokerage site is also known for offering commission-free transaction services. It is regulated by several renowned financial authorities and offers a wide range of financial instruments and products (stocks, forex, commodities…), which arguably makes it the best forex trading platform for anyone starting a trading course.

An Overview of Some Trading Platforms

Forex platforms are brokerage websites where you can open a forex account and exchange currencies. The trading platform is an essential tool when it comes to trading the Forex. They vary from one site to another, depending on your level of trading knowledge, your goals and your financial capacity.

That is why it is important to know the different options available when it comes to platforms. Find out about each one before choosing the one that suits you best.

• MetaTrader – Developed by MetaQuotes, a company that specializes in building powerful, efficient multi-asset trading platforms. There are now two very popular versions: MetaTrader (MT4) and MetaTrader 5 (MT5). The one that interests us is MetaTrader (MT4), because it was developed to meet the needs of forex traders. Both platforms work on PC, on Mac, in a web browser and on mobile.
• TradingView – TradingView is seen more as a platform for real-time trading information and ideas than as a pure trading platform. Easy for beginners to use and powerful for experienced traders, TradingView offers a wealth of tools and features. It helps you carry out complete technical analysis across many markets, including the forex market. It is also a social trading platform, since users can share their trading ideas or market sentiment.

How to Choose the Best Forex Trading Platform?

Choosing the best trading platform starts with knowing which category of trader you belong to. Are you the kind of trader who likes the freedom of trading through a forex trading app? Or do you prefer to use an online platform? Or perhaps you favor forex trading software? In that case, maybe you should opt for an automated trading strategy?

That is why the choice of a trading platform must be based on your needs, and on the trading style you want to implement. Before selecting a trading platform, think about your trading strategy, as well as the tools you will need to make the most of it. This can depend on your location, as with forex Morocco or forex Tunisia.

Automated Trading

• Automated forex trading is an operation that consists in placing stock market orders through an autonomous computer trading program. Although it does not guarantee bigger profits than manual trading, automated forex trading remains widely used.
• In fact, the majority of financial orders executed today on the markets are carried out by automated trading algorithms. This automated trading software, also known as an Expert Advisor or EA, is programmed to run on one specific trading platform.
• The MetaTrader platform is by far the preferred trading platform for algorithmic trading, both for MT4 EAs and MT5 EAs. More specifically, the complementary forex trading robot is installed and used on the MetaTrader 4 forex platform.

The Role of Forex Trading Software

Forex trading software performs the following roles:

• Market analysis: technical analysis and/or fundamental analysis based on the trading strategy
• Automatic opening of trades when the specified conditions are met
• Closing of open positions according to the specified conditions (take profit, stop loss, reversal…)
• Risk management: size of open positions, number of positions open at the same time.

Advantages of Automated Forex Trading

Automated trading lets you carry out transactions on the financial markets automatically. It offers many advantages, such as:

• Automated trades
• Accessibility with no prior experience
• Ease of use
• No risk of human error.

The Drawbacks of Trading Forex

Like any investment, trading forex involves risks — worth weighing if you keep asking yourself: is forex trading profitable? They include in particular:

• Exchange rate volatility.
• The addiction to the thrills that trading provides.
• An unregulated over-the-counter market.

Features of the Best Forex Trading Platform

Whatever your level in forex trading, your goals or your investment capacity, the best platform should offer you the following services:

• Fast execution of tasks.
• Reliable charts, quotes and other tools that can help you develop your strategy.
• Security and regulation by a solid, credible regulatory body.
• Fees and commissions at transparent, affordable costs.
• Diversity in investment choices.

Forex Trading Strategies

There are several forex trading strategies, each used by different investors operating in the market. They include:

• Scalping. This trading style is popular with aggressive forex traders who are very active in the market. The aim of this strategy is to buy and sell a currency pair within minutes, in order to pocket a quick profit.
• Day trading: this consists in holding your forex trading positions for anywhere from a few minutes to several hours within the same trading day.
• Forex swing trading: far less aggressive than the first two strategies, it is used by medium-term traders. It takes advantage of sizable directional moves known as swings.

Forex Market Analysis

It is important for a good trader to run a forex market analysis before taking an investment position. This can be either technical analysis or fundamental analysis.

• Forex technical analysis – This is the study of the price action of currency pairs. It usually means pure chart analysis combined with a technical and mathematical analysis applied to prices. The idea behind technical analysis is that price action already reflects all the information available at any given moment, so analyzing prices alone is enough to trade. In addition, technical analysis assumes that historical price movements repeat themselves. By analyzing past prices, you can therefore anticipate the potential future movement of a currency pair.
• Forex fundamental analysis – Unlike the first, it does not focus on price action but rather on a country’s fundamental factors. It is used to assess the country’s overall economic health, with the aim of predicting whether demand for its currency will rise or fall. To do this, it examines all economic statistics and reports to determine currency price movements. This technique is very often used by central banks, notably to guide their interest rate decisions.

5 Keys to a Successful Forex Trading Strategy

1. Never risk more than 1% to 2% of your capital per position – If you have around €100, limit each stake to €1 or €2 — the rule followed by prudent traders. The goal is to be able to absorb the losses if things go wrong.
2. Limit your losses in forex trading with stop-loss orders – You can limit your losses by combining the stop-loss order with a maximum 2% exposure of your forex trading funds.
3. Manage your risk tolerance – Are you able to cope with losses during your forex strategy? Risk tolerance shows your ability to manage and get through periods of crisis.
4. Know the best time to buy and sell in forex – Here you need to know the gap between your price and your broker’s. Asset values are not always identical. Your broker offers to buy or sell forex assets at a price that is favorable to them.
5. Calculate your potential future income – Once you have deducted the spread from your trades, take out your trading calculator to work out how much you have made on your operations.

This article is for educational purposes only and does not constitute investment advice. Trading currencies with leverage carries a high risk of losing your capital; the majority of retail investor accounts lose money.