The currency markets
Forex
What is it?
Forex is where currencies are exchanged. It is the largest, most liquid financial market globally.
How does it work?
Traders buy one currency and sell another simultaneously (e.g., EUR/USD). In India, retail forex is restricted to certain INR pairs.
Benefits
- 24-hour market
- High liquidity
- Useful for hedging
Risks
- High volatility
- Leverage magnifies losses
- Complex macro drivers
Important terms
- Pip
- Smallest price movement in a currency pair.
- Spread
- Difference between bid and ask.
- Leverage
- Borrowing to amplify position size.
Common mistakes
- • Excessive leverage
- • Trading without a plan
- • Ignoring news events
Beginner tips
- • Retail forex is high risk — learn first
- • Know local regulations
- • Use small size to learn
Educational only. This page explains how forex work. It is not a recommendation to buy, sell, or hold any specific asset.