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What is forex trading? A simple guide for beginners

Currency pairs, lots, trading sessions and leverage, explained simply, with the steps to start trading forex on MetaTrader 5.

Bilal Hatab8 min read

Forex, short for foreign exchange, is the market where currencies are bought and sold against each other. It is open around the clock on weekdays, and it is the largest financial market in the world.

How currency pairs work

Currencies always trade in pairs, such as EUR/USD. The first currency is the base, and the second is the quote. A price of 1.0850 means one 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. BBCorp offers 60 currency pairs, from majors like EUR/USD and USD/JPY to minors and exotics. See them all on Forex.

Pips and lots

  • A pip is the standard unit of price movement. For most pairs it is the fourth decimal place (0.0001); for pairs with the Japanese yen it is the second (0.01).
  • A lot is the size of a trade. One standard lot is 100,000 units of the base currency; a mini lot is 10,000 and a micro lot 1,000.
  • The bigger your position, the more each pip is worth, in profit or in loss.

When the forex market is open

Forex trades 24 hours a day, five days a week, from the Sydney open on Monday morning to the New York close on Friday. The day passes through four main sessions: Sydney, Tokyo, London and New York. The busiest hours are usually when London and New York overlap.

Leverage and margin

With leverage, you open a position larger than the money you put down. BBCorp offers leverage up to 1:200, so a 100,000 US dollar position needs 500 US dollars of margin. Our guide to leverage and margin explains how it works and what it means for risk.

What moves currencies

  • Interest-rate decisions by central banks.
  • Economic data such as inflation, jobs and growth.
  • Political events and shifts in global risk appetite.

How to start trading forex with BBCorp

  1. Open an account in the client portal and complete your identity check (KYC).
  2. Fund it with one of the payment methods offered in your country.
  3. Download MetaTrader 5, log in with the details from the portal and place your first trade.

Both account types, Standard and Special, are swap-free and charge no commission. Compare them here.

Tips for beginners

  • Start with one or two major pairs and learn how they move.
  • Use a stop loss on every trade.
  • Practise on a demo account before trading real money.
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