Forex Trading Guide

What is forex trading?

Forex trading is buying one currency while selling another to profit from exchange rate movements, typically through an online broker using contracts for difference (CFDs), in a market open 24 hours a day, five days a week.

Currencies trade in pairs such as EUR/USD, where the first currency is the base and the second is the quote: the price tells you how many US dollars buy one euro. On EUR/USD, 1 pip is 0.0001, and you’ll measure your results in pips. Retail traders accounted for about 2.5% of global turnover in April 2025, about US$242 billion a day (BIS), so you are joining a market far bigger than the retail crowd. I would tell any newcomer to learn to read results in pips before money, because a pip result judges the trade idea whatever the position size, while a money result blends the idea with the size.

When you trade through an online broker rather than exchanging physical currency, you usually trade CFDs, derivatives that let a trader speculate on price moves without buying or selling the underlying asset. CFDs give you leverage, which magnifies exposure beyond the deposit, and magnifies losses as well as gains. Hold a position overnight and the broker rolls it over: the trader receives a credit or pays a debit set by the interest rate differential between the two currencies, and a large differential can move a long-held position’s result materially. Each part of forex trading, from leverage to market hours, gets its own guide below.

Guides In This Section

This section holds 26 guides under /trading/, grouped by the question they answer. I would point a new trader to the hours guide and the ECN vs standard account comparison, and my suggestion for an experienced trader is the automation and patterns guides.

Costs, Accounts And Execution

Costs and execution open this group before the risk side of a leveraged position, and I would read the margin and leverage guides together first.

• ECN vs Standard Account Comparison: Raw ECN-style accounts and commission-free standard accounts differ on cost and execution across MT4, MT5, cTrader, and TradingView.
• Understanding A Market Maker Broker: A market maker sets its own prices, fills orders from its own liquidity, and takes the other side of every trade.
• What Is OTC Forex Trading?: Off-exchange trading sends an order to a broker, dealing desk, or ECN, away from the central exchanges where futures change hands.
• What Is Margin In Forex: Margin is the deposit that opens a leveraged position, and the requirements around it decide how much of a balance each trade locks away.
• What Is Leverage In Forex: Leverage works by magnifying exposure beyond the deposit, and the guide covers what it costs and the caps regulators put on it.
• Guide: How to Trade Interest Rates: Interest rate differentials between two currencies underpin the carry trade, in which a trader holds the higher-yielding currency against the lower-yielding one.
• What Is Stop Loss In Forex?: Stop-loss orders cap the loss on a trade, and placing them matters in a market that runs around the clock through the trading week.
• What Is A Drawdown In Forex: Drawdown measures how far an account falls from its peak, and tracking it shows how deep a losing run has gone.

Markets, Hours And Data

Session hours and the most traded currency pairs come first here, with the market’s size and structure behind them in the BIS data.

• Forex Market Hours Guide: The four trading sessions each have opening and closing times in UTC and local time, along with the overlaps between them.
• The Best Forex Currency Pairs to Trade: Currency pairs divide into majors, minors, and exotics, and the most traded of them are the ones to know first.
• Forex Trading Statistics: Market size and structure come from the BIS Triennial Survey, which counts global turnover every three years.
• USA Forex Statistics: Turnover and share of global trading show how the United States forex market looks in the BIS data.
• UK Forex Statistics: The BIS data behind London's share of global turnover extends to the whole United Kingdom market.
• Australian Forex Statistics: Australia's forex market, set against the rest of the world through the BIS data, shows where the country sits in global turnover.

Analysis And Strategy

Reading price action fills most of this group, and my pick is the bullish and bearish pattern guides as a pair, with hedging and signals making up the rest.

• Forex Chart Patterns: A Complete Guide to Reading Price Action: Chart patterns show what price has been doing, and the chosen time frame changes what they say.
• Mastering Bullish Candlestick Patterns: Bullish candlestick patterns flag a possible rise in price, and the risk management that goes with them fills the rest of the guide.
• Bearish Forex Trading Patterns: Strategies, Analysis, and Risk Management: Bearish patterns give short sellers their setups, with the analysis and risk management a short position demands.
• Harmonic Patterns For Trading Forex Guide: Harmonic patterns turn Fibonacci ratios into trade setups, including the Gartley, the Bat, and the Crab.
• Forex Hedging Strategies: Hedging opens an offsetting position to limit the risk of the first, and the strategies cover the main ways to do it.
• What Are Forex Signals: Signals carry a pair, a direction, an entry, a stop loss, and a take profit, and judging the provider matters just as much.

Automation And Tools

Handing entries and exits to a program is the theme here, from Expert Advisors and robots to the AI tools now used in analysis.

• What Is Forex EA Trader?: Expert Advisors are automated trading programs that run on MT4 and MT5, trading written rules without a trader at the screen.
• What Are The Best Forex Robots?: Robots are commercial Expert Advisors sold as ready-made systems, and the assessment comes before one goes near real money.
• Essential Guide: How To Automate Forex Trading: Automating entries and exits begins with written rules, which then go to work on MT4, MT5, and cTrader.
• Best AI For Forex Trading: AI tools now play a part in forex analysis and trading, and the guide weighs which ones belong in a workflow.

Learning And Products

The last two guides cover building skills through courses and broker education, and the difference between trading a CFD and owning a share.

• Best Forex Trading Courses 2026: Forex trading courses and broker education both teach the craft, and the choice between them comes down to how a person learns.
• CFD vs Stock Trading Guide: CFDs let a trader speculate on a share's price moves without owning the share, and the comparison shows what that changes.

How To Choose A Forex Broker

To choose a forex broker you work through four decisions in order: the broker entity and regulator that will hold the account, dealing desk or no dealing desk, commission or commission-free pricing, and the platform. My advice is to check the entity first, because the entity that holds the account decides the rules that govern a trader’s money and the leverage on offer. The model a broker uses to fill orders shapes the spreads and execution on every trade. Our comparison rates brokers out of 100 across eight weighted categories, and you can compare forex brokers there before committing. The broker model is where I start below, because pricing and platform both sit on top of it.

Dealing Desk And No Dealing Desk Brokers

A dealing desk broker, also called a market maker, fills your orders from its own liquidity and sets its own bid and ask prices, which makes it the counterparty to your trade. Because it quotes the prices, it usually charges no commission, widening the spread instead. That leaves one number to check when you price a trade: the spread. Our market maker broker guide takes the model apart in more detail.

With a no dealing desk (NDD) broker, your order passes to external liquidity providers, using straight-through processing (STP) or an electronic communications network (ECN), and you usually get tighter spreads with a commission. Day traders, scalpers, and algorithmic traders usually weigh the tighter spreads and faster execution of NDD pricing against that commission. In my view, a beginner should start with a commission-free account, because the cost of each trade then sits in a single number, and the one number to check is the spread on the pair they will trade most. Our OTC forex trading guide covers how the trades reach the market, and whichever model you choose, the next decision is how the account is priced.

Account Types And Trading Costs

The two account types are the commission account, sometimes called raw or ECN-style, which charges the spread plus a round-turn commission per standard lot of 100,000 units of the base currency, and the commission-free account, sometimes called standard, which builds the broker’s charge into a wider spread. To compare them, work out the all-in cost per standard lot: the spread in pips times US$10, which is what one pip is worth on a standard lot when the pair is quoted in US dollars, plus the round-turn commission. Take two worked examples, neither of them a live broker price: a 0.1 pip spread with US$3.50 per side (US$7 round turn) per standard lot costs US$8 a lot, and a 1.0 pip commission-free spread costs US$10 a lot. At those numbers the commission account costs less, and the same arithmetic works on whatever spread and commission you are quoted.

Real numbers make this comparison easier, and we publish them on two pages of our own. Our lowest spread forex brokers page ranks brokers by the average EUR/USD raw spread each one publishes, lowest first, with brokers that state how and when they measured coming first, and converts each into an all-in cost per lot, and our lowest commission forex brokers page compares the commission charges. If you trade often, I would pick the commission account, because the arithmetic above shows how a tight spread plus the round-turn commission can come out below the commission-free price.

Beyond those two pricing models, brokers may offer other account options, each aimed at a different situation:

• Islamic accounts: these are swap-free accounts for traders who cannot pay or receive interest.
• Micro accounts: these use smaller lot sizes and usually smaller minimum deposits, so you can start with less money.
• VIP accounts: these are built around higher trading volumes or higher deposits.
• Professional accounts: these are for experienced traders who qualify, and the leverage caps later in this guide are retail caps.

Forex Trading Platforms

The forex trading platforms most retail traders use are MetaTrader 4 (MT4), MetaTrader 5 (MT5), and cTrader. All three support automated trading, through Expert Advisors (EAs) on MT4 and MT5 and cBots on cTrader, written in MQL4, MQL5, and C# respectively. They also include charting and technical analysis tools and backtesting for EAs and cBots, and they run on desktop, web, and mobile (Android and iOS). If automation is what you are here for, our Expert Advisors guide is where I would begin.

Some brokers also run proprietary platforms that only they offer, which are often simpler and usually lack the automation of MT4, MT5, and cTrader. In my view, you should stay with the three above if automation matters to you, and our best MT4 brokers and best MT5 brokers comparisons rank the brokers for each. Whichever platform you settle on, the account still answers to the entity that holds it, so regulation and risk come next.

Regulation And Risk

Regulation and risk both attach to the broker entity that holds your account, because that entity sets the leverage cap you trade under. In the United Kingdom, the Financial Conduct Authority (FCA) requires 3.33% initial margin on a major currency pair, which is 30:1 (FCA Handbook COBS 22.5.11R), and the Australian Securities and Investments Commission (ASIC) requires the same 3.33%, 30:1 (ASIC Corporations (Product Intervention Order, Contracts for Difference) Instrument 2020/986). The Cyprus Securities and Exchange Commission (CySEC) applies the same 30:1 for EU retail clients under its national measures (Policy Statement PS-04-2019). In the United States, where retail traders cannot trade CFDs off exchange, the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA) set a 2% minimum security deposit on major pairs, 50:1, and 5% on other pairs, 20:1 (17 CFR 5.9 and NFA Financial Requirements Section 12). We read the caps from each regulator’s own document on September 28, 2026, and the cap that applies to you depends on the entity that holds the account, because one brand can hold licences from several regulators.

Risk tools work at the trade level and the account level: stop-loss and limit orders cap or lock in a result on a trade, some brokers offer guaranteed stop-loss orders, and negative balance protection stops an account going below zero. A demo account lets you practise all of this in live market conditions with a virtual balance, and our forex demo accounts comparison lists the options. I recommend a demo before you fund a live account, so your first mistakes cost you nothing. How leverage behaves is easier to see in numbers, so the worked example below runs one trade end to end.

How To Trade Forex: An Example

To trade forex you buy one currency and sell another through a broker, so here is a hypothetical trade: you buy 10,000 units of EUR/USD, a mini lot, at 1.1500. On EUR/USD one pip is 0.0001 and is worth US$1 on 10,000 units, and every figure in this example comes before spread and commission. If the price rises to 1.1550, that is 50 pips and a US$50 gain before costs. If it falls to 1.1430, that is 70 pips and a US$70 loss before costs. The position is worth US$11,500, so at 30:1 leverage it needs US$383.33 of margin.

The US$70 loss is about 18% of the US$383.33 margin, and that is leverage at work: 70 pips against you took roughly a fifth of the margin behind the trade. You can run your own pair, size, and prices in the calculator below before opening a position. I would run that calculator with the stop-loss price entered, because the loss at the stop is the figure that tells me whether the position size is right.

What Moves Currency Prices?

What moves currency prices comes down to five broad drivers:

1. Politics
2. Inflation and deflation
3. Central banks and monetary policy
4. Economic growth
5. The relative attractiveness of a country to investors

A central bank rate decision feeds through to your rollover: when a trader holds a position overnight, the broker rolls it over, and the trader receives a credit or pays a debit set by the interest rate differential between the two currencies, and a large differential can move a long-held position’s result materially. I would check the size of that credit or debit before holding a position for more than a few days, because it accrues every night, and its total effect grows the longer the position runs. Rate decisions land at set times, and the market runs to a schedule of its own, so the next section covers its trading hours.

When Is The Forex Market Open?

The forex market is open 24 hours a day, five days a week. Each week opens with the Sydney session at 07:00 on Monday in Sydney, 21:00 UTC on Sunday while Sydney is on AEST and 20:00 UTC while on AEDT. It closes with the New York session at 17:00 on Friday in New York, 21:00 UTC while New York is on EDT and 22:00 UTC while on EST, and the weekend closure is 46 to 48 hours depending on the season. Its busiest window is the London and New York overlap, 12:00 to 16:00 UTC while both are on summer time, 13:00 to 17:00 UTC while both are on winter time, and 12:00 to 17:00 UTC in the weeks the two are out of step. The Forex Market Hours Guide lists every session time in UTC and local time.