Forex trading 101 is your essential introduction to the world of currency trading. As the largest and most liquid financial market in the world, forex offers countless opportunities — but also demands knowledge, discipline, and strategy. This guide will walk you through the foundational concepts, key terminology, market structure, and beginner strategies to get started.

You’ll also discover how structured education can accelerate your learning curve and help you trade confidently with real-world understanding.

Key Takeaways

• Forex trading involves buying and selling currency pairs on a decentralised global market.
• The market operates 24 hours a day, five days a week across major financial centres.
• Key concepts include pips, leverage, margin, lots, and major currency pairs.
• Beginners should practise on demo accounts and start with basic strategies.
• A structured course provides guidance, tools, and live market training for faster progress.

What Is Forex Trading?

Forex, or foreign exchange, is the act of buying one currency while simultaneously selling another. Traders profit by speculating on whether a currency will rise or fall in value relative to another.

For example, buying GBP/USD means you expect the British pound to strengthen against the US dollar.

Who Trades Forex?

• Central banks: influence currency values via interest rates and market intervention.
• Commercial banks & hedge funds: trade for speculation or hedging.
• Corporations: exchange currency to pay for goods or services abroad.
• Retail traders: individuals like you, using online brokers and trading platforms.

How Forex Trading Works

The forex market is decentralised and operates across time zones. Here’s how it functions:

Market Sessions

Session	Time (GMT)	Major Centres
Asia	00:00 – 08:00	Tokyo, Hong Kong, Singapore
Europe	07:00 – 16:00	London, Frankfurt
North America	13:00 – 22:00	New York, Toronto

Currency Pairs

• Major pairs: EUR/USD, GBP/USD, USD/JPY, USD/CHF
• Minor pairs: EUR/GBP, GBP/JPY, AUD/NZD
• Exotic pairs: USD/TRY, EUR/ZAR

Key Forex Trading Terms

• Pip: The smallest price movement (usually 0.0001)
• Spread: Difference between bid and ask price
• Leverage: Borrowed capital to increase trade size (e.g., 30:1 in the UK)
• Lot: Standard unit size; 1 lot = 100,000 units
• Margin: Required deposit to open a leveraged position

Beginner Forex Trading Strategies

1. Trend Following

Identify currencies moving in a strong direction using tools like:

• Moving averages
• RSI or MACD confirmation
• Support and resistance levels

2. Breakout Trading

Trade currency pairs that break above or below key consolidation areas:

• Use volatility indicators like Bollinger Bands
• Confirm with volume or candlestick patterns

3. News Trading

Trade around major economic events like:

• Non-Farm Payrolls (NFP)
• Central bank rate decisions
• Inflation and GDP reports

Common Mistakes To Avoid

• Overleveraging
• Trading without a plan
• Chasing losses
• Ignoring risk management
• Falling for scams or unregulated brokers

Case Study: Starting Forex Trading in a Course Environment

In the Foundations Module of the Forex Course, beginners are guided through live simulations and real-time examples to practise placing trades, calculating pip value, using stop-loss orders, and managing risk.

Students follow a simple GBP/USD strategy using:

• Basic moving averages
• Risk-reward ratios of 1:2
• A demo account to build confidence

After several weeks, students transition to live trading with a clear plan, risk framework, and understanding of how to adapt to market conditions.

Frequently Asked Questions

What is forex trading in simple terms?

Forex trading is the exchange of one currency for another to profit from price changes.

How much money do I need to start trading forex?

In the UK, you can start with as little as £50, but £500–£1,000 is recommended for better risk management.

Is forex trading legal in the UK?

Yes, forex trading is legal and regulated by the Financial Conduct Authority (FCA).

Can I learn forex trading on my own?

Yes, but learning through a structured course helps avoid costly mistakes and speeds up progress.

What’s the best forex pair for beginners?

EUR/USD is the most liquid and often has the tightest spreads, making it ideal for beginners.