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Lesson 1 of 8
Introduction to Forex
What is Forex?
The foreign exchange market (Forex or FX) is where currencies are traded. It's the largest financial market in the world with daily volume over $6 trillion.
Why Forex is Different
- 24/5 Market: Open from Sunday 5 PM ET to Friday 5 PM ET
- No Central Exchange: Decentralized over-the-counter (OTC) market
- High Liquidity: Major pairs have minimal slippage
- Leverage Available: Control large positions with small capital
- Two-Way Trading: Profit from rising OR falling currencies
Currency Pairs
Currencies are always traded in pairs. The first currency is the BASE, the second is the QUOTE.
💡 EUR/USD = 1.0850
This means 1 Euro costs 1.0850 US Dollars. If you think the Euro will strengthen against the Dollar, you BUY EUR/USD. If you think it will weaken, you SELL.
Major Pairs
EUR/USD
Euro vs US Dollar. Most traded pair. Known as "Fiber"
GBP/USD
British Pound vs Dollar. Known as "Cable"
USD/JPY
Dollar vs Japanese Yen. Known as "Gopher"
USD/CHF
Dollar vs Swiss Franc. Known as "Swissie"
Trading Sessions
| Session | Time (ET) | Characteristics |
|---|---|---|
| Sydney | 5 PM - 2 AM | Low volume, AUD/NZD active |
| Tokyo | 7 PM - 4 AM | JPY pairs active |
| London | 3 AM - 12 PM | Highest volume, EUR/GBP active |
| New York | 8 AM - 5 PM | USD pairs active, overlaps with London |
📋 Key Takeaways
- Review this lesson's material before moving on
- Practice the concepts on a demo account
- Take notes on what you've learned