According to the Bank for International Settlements, forex markets are more highly traded than any other, with trillions of dollars of currencies bought and sold each day. In this page, we’ll cover how you can find out what makes it so popular first hand.
Get started below, or jump ahead to a section:
How currency markets work
How to start trading forex
Forex pair categories
What moves forex markets
Forex FAQs
How do currency markets work?
Currency markets work via a global network of banks, business and individuals that are constantly buying and selling currencies with one another. Unlike most financial assets – such as shares or commodities – the foreign exchange market has no physical location and trades 24 hours a day.
This is called an over-the-counter market, and it means that currency prices are constantly fluctuating in value against each other, potentially offering a greater number of trading opportunities.
There are four main forex trading hubs: London, Tokyo, New York and Sydney. When trading stops in one, it starts in another.
However, forex is also traded across Zurich, Frankfurt, Hong Kong, Singapore and Paris.
At City Index, you can speculate on the future direction of currencies, taking either a long (buy) or short (sell) position depending on whether you think a forex pair’s value will go up or down. The below video shows you how to trade the EUR/USD currency pair via a CFD.
Forex trading examples
For more information on how forex trading works, look through our list of forex trading examples.
To start trading forex, you’ll need to get to know a few key concepts and terms. Let’s take a look at each in turn.
Base currencies and quote currencies
You'll always trade forex in pairs. That means when you buy one currency, you do so by selling another. And when you sell one currency, you do so by buying another.
When you buy EUR/USD, for example, you're buying the euro while selling the US dollar.
The two currencies in a pair are known as the base and the quote.
The base is the first currency. In EUR/USD, it is the euro
The quote is the second currency. In EUR/USD, it is the dollar
A forex pair tells you how much of the quote currency you'll need to exchange for a single unit of the base. If EUR/USD is trading at 1.1810, then you'll need to sell 1.1810 USD to buy a single euro.
Forex traders look to take advantage of changes in the relative value of the base and quote currency in a pair. You could, for instance, buy euros for dollars when EUR/USD is at 1.1810. If the euro strengthens against the US dollar, then your euros will be worth more dollars – so can sell euros for dollars and keep the difference as profit.
If EUR/USD had dropped in price, though, you might have to sell your euros for less than you bought them. In this case, you would make a loss.
For more information on pairs, take a look at our What is forex trading? page.
Pips, lots and margin
Pips measure how much a forex pair has moved. A single pip is equivalent to a one-digit move in the fourth number after the decimal point. If EUR/USD moves from 1.1810 to 1.1817, it has gone up seven pips.
One key exception to this rule is when the Japanese yen is the quote currency. In this case, a pip is calculated as a one-digit move in the second number after the decimal point. If USD/JPY moves from 110.05 to 110.01, it has fallen four pips.
As you may have noticed, even a 50-pip move won't earn you much if you trade 100 or 500 units of currency. That’s why most FX traders buy and sell forex in lots – batches of currencies that enable you to take advantage of even relatively small price moves.
A standard lot is equivalent to trading 100,000 units of currency. Buying one lot of EUR/USD means purchasing 100,000 euros for their value in US dollars. When CFD trading on forex, buying a single CFD is equivalent to trading one lot.
To avoid having to tie up all their capital when opening one position, most forex traders use leverage. With leverage, you only have to put up a fraction of your position's full value to open a trade. The amount you are required to put up is known as your margin.
Find out more about forex leverage and margin.
How to start trading forex
1. Choose a currency pair
The first step to opening a forex trade is to decide which currency pair you wish to trade. There are over 80 to choose from.
Forex pair categories
There are three main categories of forex pair: majors, minors (or major crosses) and exotics.
Majors consist of the world’s biggest currencies against the US dollar, and make up around 85% of forex trading volume. The majors are EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CHF and USD/CAD
Minors are all the other combinations of the world’s biggest currencies, such as EUR/GBP and AUD/JPY. These are also often referred to as major cross pairs
Exotics are pairs that include less-traded currencies, such as the Turkish lira (TRY) or Mexican peso (MXN)
Most new traders will pick one or two major pairs to focus on, often starting out with euro-dollar (EUR/USD). This is the world’s most traded currency pair, and typically has the tightest spreads.
2. Decide how you want to trade forex
There are two main ways to trade forex: derivatives such as Spread Betting and CFDs, or spot forex trading. They all enable you to go long and short on currency pairs, but they work in slightly different ways.
-- Edited by vfmoows on Friday 18th of December 2020 01:41:07 PM
You can trade Forex at any convenient moment. This market is working 24 hours a day. And there are four time sessions around the planet that alternate each other. But the main task of every trader is to find a trustful broker as it will be your link to the financial market. I like xm broker https://tradersunion.com/brokers/forex/view/xm_group/. It takes care of its clients and offer many incentives.
'Hello how are you? If you came to this review, it is because you are looking for more information about the PRIME BIOME REVIEWS. ❤️ PRIME BIOME GUMMIES REVIEWS You want to know if PRIME BIOME REVIEWS works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about PRIME BIOME REVIEWS for gut and skin health. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the MITOLYN REVIEWS. ❤️ MITOLYN You want to know if MITOLYN REVIEWS works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about MITOLYN REVIEWS for weight loss. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the The Genius Wave Reviews. ❤️ The Genius Wave Review You want to know if The Genius Wave Reviews works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about The Genius Wave Reviews for cognitive enhancement. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the THE MEMORY WAVE REVIEWS. ❤️ THE MEMORY WAVE REVIEWS You want to know if THE MEMORY WAVE REVIEWS works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about THE MEMORY WAVE REVIEWS for cognitive enhancement. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the What is The Salt Trick for Men. ❤️ Blue Salt Trick You want to know if What is The Salt Trick for Men works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about What is The Salt Trick for Men for male performance. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the FELLA HEALTH REVIEWS. ❤️ FELLA HEALTH REVIEWS You want to know if FELLA HEALTH REVIEWS works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about FELLA HEALTH REVIEWS for weight loss. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the Tonic Greens Reviews. ❤️ Tonic Greens Reviews You want to know if Tonic Greens Reviews works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Tonic Greens Reviews for herpes treatment. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the Nitric Boost Ultra Reviews. ❤️ Nitric Boost Ultra You want to know if Nitric Boost Ultra Reviews works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Nitric Boost Ultra Reviews for Male Enhancement. '
Hello how are you? If you came to this review, it is because you are looking for more information about the Aqua Sculpt. ❤️ Aqua Sculpt You want to know if Aqua Sculpt works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Aqua Sculpt for weight loss.
'Hello how are you? If you came to this review, it is because you are looking for more information about the KETO FLOW + ACV REVIEWS. ❤️ KETO FLOW + ACV REVIEWS You want to know if KETO FLOW + ACV REVIEWS works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about KETO FLOW + ACV REVIEWS for weight loss. '
Hello how are you? If you came to this review, it is because you are looking for more information about the Prime Biome Reviews. ❤️ PrimeBiome You want to know if Prime Biome Reviews works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Prime Biome Reviews for gut & skin health.
Hello how are you? If you came to this review, it is because you are looking for more information about the Mitolyn. ❤️ Mitolyn Reviews You want to know if Mitolyn works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Mitolyn for weight loss.
'Hello how are you? If you came to this review, it is because you are looking for more information about the What is The Salt Trick for Men. ❤️ Blue Salt Trick You want to know if What is The Salt Trick for Men works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about What is The Salt Trick for Men for male performance. '
Hello how are you? If you came to this review, it is because you are looking for more information about the Tonic Greens. ❤️ Tonic Greens Review You want to know if Tonic Greens works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Tonic Greens for immunity and herpes.
'Hello how are you? If you came to this review, it is because you are looking for more information about the PURDENTIX REVIEWS. ❤️ PURDENTIX You want to know if PURDENTIX REVIEWS works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about PURDENTIX REVIEWS for oral health. '
Hello how are you? If you came to this review, it is because you are looking for more information about the Wellness Prime Gut Drops. ❤️ Wellness Prime Gut Drops Reviews You want to know if Wellness Prime Gut Drops works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Wellness Prime Gut Drops for weight loss.
Hello how are you? If you came to this review, it is because you are looking for more information about the mounfit. ❤️ mounfit weight loss You want to know if mounfit works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about mounfit for weight loss.
Hello how are you? If you came to this review, it is because you are looking for more information about the Salt Trick for Men. ❤️ Salt Trick for Men You want to know if Salt Trick for Men works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Salt Trick for Men for male performance.
Hello how are you? If you came to this review, it is because you are looking for more information about the Aqua Sculpt. ❤️ Aqua Sculpt You want to know if Aqua Sculpt works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Aqua Sculpt for weight loss.
Hello how are you? If you came to this review, it is because you are looking for more information about the Prime Biome Reviews. ❤️ Prime Biome Gummies You want to know if Prime Biome Reviews works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Prime Biome Reviews for gut health.
'Hello how are you? If you came to this review, it is because you are looking for more information about the 7 second ice water hack. ❤️ 7 second ice water hack You want to know if 7 second ice water hack works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about 7 second ice water hack for weight loss. '
Hello how are you? If you came to this review, it is because you are looking for more information about the The Memory Wave. ❤️ The Memory Wave Reviews You want to know if The Memory Wave works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about The Memory Wave for brain enhancement.
'Hello how are you? If you came to this review, it is because you are looking for more information about the GUT DROPS. ❤️ Does Gut Drops Work You want to know if GUT DROPS works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about GUT DROPS for weight loss. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the Gut Drops supplement. ❤️ Gut Drops for weight loss You want to know if Gut Drops really work, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Gut Drops for weight loss. '
Hello how are you? If you came to this review, it is because you are looking for more information about the Mitolyn Reviews. ❤️ Mitolyn 2025 You want to know if Mitolyn Reviews works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Mitolyn Reviews for weight loss.
'Hello how are you? If you came to this review, it is because you are looking for more information about the Mitolyn formula. ❤️ Does Mitolyn Work? You want to know if Mitolyn really works, what ingredients it contains, and how it helps with weight and focus? Stay here with me in this review and I’ll tell you everything you need to know about Mitolyn supplement. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the Mounfit. ❤️ Mounfit You want to know if Mounfit works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Mounfit for weight loss. '
'Hello how are you? If you came to this review, it is because you are looking for more information about Does Gut Drops Work? ❤️ Does Gut Drops Work? You want to know if Gut Drops really work, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Gut Drops for weight loss. '
'Hello how are you? If you came to this review, it is because you are looking for more information about the Quietum Plus review. ❤️ Quietum Plus Review You want to know if Quietum Plus really works, what ingredients it contains, and how it helps with hearing support and focus? Stay here with me in this review and I’ll tell you everything you need to know about Quietum Plus supplement. '
'Hello how are you? If you came to this review, it is because you are looking for more information about Mitolyn Complaints. ❤️ Mitolyn Complaints You want to know if Mitolyn really works, what’s inside, and where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Mitolyn for energy, metabolism, and mental clarity. '
Hello how are you? If you came to this review, it is because you are looking for more information about the Beast Force Reviews. ❤️ Does Beast Force Work You want to know if Beast Force Reviews works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Beast Force Reviews for male enhancement.
Hello how are you? If you came to this review, it is because you are looking for more information about the What is The Elephant Root Trick. ❤️ Elephant Root Trick Reviews You want to know if What is The Elephant Root Trick works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about What is The Elephant Root Trick for male vitality.
Hello how are you? If you came to this review, it is because you are looking for more information about the memoforce. ❤️ memoforce You want to know if memoforce works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about memoforce for memory loss.
Hello how are you? If you came to this review, it is because you are looking for more information about the Aqua Sculpt Reviews Consumer Reports. ❤️ Aqua Sculpt Pills Reviews You want to know if Aqua Sculpt Reviews Consumer Reports works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about Aqua Sculpt Reviews Consumer Reports for weight loss.
Hello how are you? If you came to this review, it is because you are looking for more information about the mitolyn reviews 2025. ❤️ mitolyn reviews 2025 You want to know if mitolyn reviews 2025 works, how to use, where to buy it? Stay here with me in this review and I’ll tell you everything you need to know about mitolyn reviews 2025 for weight loss.
'Hello how are you? If you came to this review, it is because you are looking for more information about Beast Force Reviews. ❤️ Beast Force Reviews You want to know if Beast Force really works, how to use it, and what real users are saying? Stay here with me in this review and I’ll tell you everything you need to know about Beast Force Supplement for male enhancement and confidence. '