Start with the mechanics: currency pairs, pips, lots, spread, leverage and margin. Then learn to size a position from your stop-loss distance and practise on a demo account with a tier-1 regulated broker. Trade 0.01 lots with real money only after that. Never risk more than 1% of your account on one trade.
The market and the odds
Forex is the exchange of one currency for another. There is no central exchange, so the price on your chart is your broker's price. The market runs 24 hours, five days a week. Around 70–80% of retail accounts lose money. The causes cluster around sizing and behaviour, not chart reading.
Pairs, pips and lots
Every forex trade is two trades. Buying EUR/USD means buying euros and selling dollars. EUR/USD is the pair to start with, for its tight spreads and deep liquidity.
A pip is a distance, not an amount of money. A lot is your position size: 1.00 is 100,000 units and 0.01 is 1,000. Lot size is an output of your stop, never an input. See currency pairs, pips and lot sizes.
Costs, leverage and margin
The spread is the gap between bid and ask. You buy at the ask and sell at the bid, so every trade begins at a loss. It widens around rollover and major news. Holding past rollover pays or charges swap, depending on the pair and direction. See the spread guide.
Leverage is the ratio between the position you control and the margin needed to hold it. At 100:1, $1,090 of margin controls a $109,000 EUR/USD position. Leverage does not determine your risk. Position size does. Margin is collateral, not risk. Read leverage explained.
Brokers and orders
Verify regulation on the regulator's own public register, not on the broker's website. Be cautious with offshore-only licences, and decline deposit bonuses: they are a trap. Check that you can trade 0.01 lots. We are an HFM partner and earn commission, so read how to choose a broker with that in mind.
Learn the main order types: market, limit, stop and stop-limit. Your stop loss is a stop order. Attach it at entry, every time. See order types.
Sessions and gaps
The London and New York overlap, 12:00–16:00 UTC, has peak liquidity. The Asian session tends to range. Price can gap straight through your stop over the weekend, and a stop cannot protect against that. See market hours.
Risk comes first
Find your level, place the stop where your idea is proven wrong, then let arithmetic give the lot size. A wider stop means a smaller position, not more risk.
Never move a stop further away. Never add to a losing position. A 50% drawdown needs a 100% gain to recover. Read how to set a stop loss and why most traders lose.
Where to go next
Move to 0.01 lots after 30 consecutive trades that followed your plan. Then read the technical analysis guide, followed by strategy and risk. Gold comes after both: the XAUUSD guide. Use the calculators and the glossary along the way.
Questions
How long does it take to learn forex trading?
Mechanics take two to four weeks. Competent chart reading takes six to twelve months. Consistent profitability across varied market conditions takes two to five years, for the minority who get there.
Should I use a demo account or real money?
Both, in sequence. Demo teaches platform mechanics. It cannot teach the response to real loss. Move to 0.01 lots once the mechanics are automatic.
70–80% of retail investor accounts lose money trading CFDs. This page is education, not advice. All trade examples are constructed composites.
