If you’ve ever exchanged money for a holiday abroad or checked how the dollar is performing against the euro, you’ve already brushed up against the largest financial market in the world — the foreign exchange market, or simply, forex.
At Rabs Markets, we believe that knowledge is the strongest currency you can hold. This beginner’s guide will break down exactly what forex trading is, how it works, and what you need to know to start trading confidently.
🌍 What is Forex Trading?
Forex trading means buying one currency while simultaneously selling another — traders profit by speculating on how these currencies will change in value against each other.
For example, if you believe the euro will strengthen against the US dollar, you might buy EUR/USD. If you’re right, you make a profit when the euro’s value rises relative to the dollar.
The forex market is:
The largest market in the world, with over $7 trillion traded daily.
Open 24 hours a day, five days a week.
Decentralized, meaning it’s not run by a single exchange — currencies are traded electronically worldwide.
🔑 How Does Forex Trading Work ?
Currencies are always traded in pairs — think EUR/USD, GBP/JPY, or USD/CHF. The first currency in the pair is the base currency, and the second is the quote currency.
If you buy a pair, you’re buying the base currency and selling the quote currency.
If you sell a pair, you’re selling the base currency and buying the quote currency.
🧩 Why Do People Trade Forex?
People trade forex for various reasons:
Speculation: Traders profit from price movements.
Hedging: Companies use forex to protect profits from currency risks.
Diversification: Investors add forex to spread risk beyond stocks or commodities.
⚡ Key Benefits of Forex Trading
High Liquidity: You can enter and exit trades easily.
Low Costs: Many brokers, like Rabs Markets, offer tight spreads and low commissions.
Leverage: You can control large positions with a relatively small amount of capital.
Accessibility: Trade anywhere, anytime — all you need is an internet connection.
📊 Who Trades Forex?
Retail Traders: Individuals like you.
Banks & Financial Institutions: Big players who make up most of the market volume.
Governments & Central Banks: They intervene to stabilize or influence their currency.
Corporations: Companies that do business internationally use forex to exchange payments.
🗂 Basic Forex Terms Every Beginner Should Know
Pip: The smallest price movement a currency pair can make (usually 0.0001).
Spread: The difference between the buy (ask) price and the sell (bid) price.
Leverage: Borrowed capital that allows you to trade larger positions than your deposit.
Lot Size: The volume of currency units you trade.
Margin: The amount of money you need to open a leveraged position.
🏁 How to Start Trading Forex with Rabs Markets
1️⃣ Learn the Basics: Read guides, watch webinars, and understand how the market works.
2️⃣ Choose an Account Type: Rabs Markets offers beginner-friendly Cent Accounts and Standard Accounts for those ready to grow.
3️⃣ Practice with a Demo Account: Test your strategies with virtual funds before risking real money.
4️⃣ Develop a Strategy: Successful traders plan their trades, manage risk wisely, and stay disciplined.
5️⃣ Start Small, Grow Smart: Never risk more than you can afford to lose. Forex rewards patience and practice.
