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Module 2 of 6

Forex Fundamentals

Learn how the currency market works, how forex trades are measured and what drives exchange rates.

7 lessonsAbout 35 min of reading15-question exam

Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Educational content only. Nothing here is a recommendation, and no result is guaranteed.

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What you will be able to do

This module explains the foreign exchange market from the ground up: how pairs are quoted, how pips, lots and spreads turn into money, and how leverage and margin work. You will be able to read a forex quote, do the core position arithmetic and understand the main forces and costs behind currency trading.

Lessons

  1. 1What Is Forex? How the Currency Market WorksThe biggest market in the world, how it is organised, who trades it and what retail traders actually do.5 min
  2. 2Currency Pairs Explained: Base, Quote, Majors and CrossesHow to read a pair, what base and quote mean, and the differences between majors, minors and exotics.5 min
  3. 3Pips, Lots and Spreads: Measuring Moves and CostsThe units of forex: pip size, pip value, lot sizes and how the spread works as a cost.5 min
  4. 4Forex Leverage and Margin: How Exposure Is MagnifiedHow leverage, margin, margin level and stop out work, with full calculations and the risks involved.5 min
  5. 5Forex Sessions and Liquidity: When the Market Is BusyThe Sydney, Tokyo, London and New York sessions, overlaps, liquidity and why timing affects costs.5 min
  6. 6What Moves Currencies: Rates, Inflation, Growth and SentimentThe main forces behind exchange rates: interest rates, inflation, growth, trade, politics and risk mood.5 min
  7. 7Swaps, Rollover and Carry: The Cost of Holding OvernightWhy holding a forex position overnight can earn or cost money, with calculations and the carry idea.5 min
  8. ★Module exam15 questions. Pass mark 80%. Earns 200 XP and a Module Master trophy.Locked
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