Learn to trade
Guides grouped by topic, written by the BrokaBoy Research Team. Each guide explains the concept, shows worked examples and links to the calculators and broker data you need.
Getting started2 articles
Forex trading means exchanging one currency for another and profiting if the exchange rate moves in your favour. Currencies trade in pairs such as EUR/USD: you buy the pair if you expect the first currency to strengthen against the second, and sell if you expect it to weaken. Retail traders usually do this through a broker using leveraged CFDs or spot contracts, so profits and losses are calculated from pips moved × position size, minus costs.
Technically you can start forex trading with as little as $5–$10, because several brokers have tiny minimum deposits and allow 0.01-lot (micro) trades. But to risk only 1–2% per trade with a sensible stop-loss on a standard account, you need roughly $100–$500; below that, a cent account is the only way to keep each trade small. The right amount is money you can afford to lose entirely.
Risk management2 articles
Lot size = money you are willing to risk ÷ (stop-loss in pips × pip value per standard lot). For example, risking $20 with a 25-pip stop on EUR/USD, where one standard lot (100,000 units) is worth $10 per pip, gives 20 ÷ (25 × 10) = 0.08 lots. Always round down to your broker's lot step so you never risk more than planned.
Pip value = pip size × trade size in units, which gives the value in the quote currency; then convert it into your account currency. For EUR/USD, 0.0001 × 100,000 = $10 per pip per standard lot. For USD/JPY at 150.00, 0.01 × 100,000 = ¥1,000, or about $6.67. Convert at the current rate if your account is in another currency.