{"id":25,"date":"2026-09-20T16:22:02","date_gmt":"2026-09-20T16:22:02","guid":{"rendered":"https:\/\/brokerspulse.com\/education\/forex-basics\/"},"modified":"2026-09-20T16:22:03","modified_gmt":"2026-09-20T16:22:03","slug":"forex-basics","status":"publish","type":"page","link":"https:\/\/brokerspulse.com\/en_gb\/education\/forex-basics\/","title":{"rendered":"Forex basics: how the market works"},"content":{"rendered":"
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Lesson 1<\/p>\n\n\n\n

2 min read \u00b7 Updated September 2026<\/p>\n<\/div>\n\n\n\n

The foreign exchange market is where one currency is exchanged for another. It has no single exchange building: banks, brokers, funds, companies and individuals trade through a network of dealers, which is why it is called an over-the-counter market. It is open around the clock on weekdays.<\/p>\n\n\n\n

Currency pairs<\/h2>\n\n\n\n

Currencies are quoted in pairs. In EUR\/USD the euro is the base currency and the US dollar is the quote currency. A price of 1.1000 means one euro costs 1.1000 US dollars. Buying the pair means buying the base and selling the quote. Selling does the opposite.<\/p>\n\n\n\n

Bid, ask and spread<\/h2>\n\n\n\n

Every pair has two prices. The bid is the price at which you can sell, and the ask is the price at which you can buy. The gap between them is the spread, and it is the most basic cost of a trade. If EUR\/USD shows 1.10000 \/ 1.10010, the spread is 1 pip.<\/p>\n\n\n\n

Pips, lots and pip value<\/h2>\n\n\n\n
Term<\/th>Meaning<\/th>Example<\/th><\/tr><\/thead>
Pip<\/td>The standard unit of price movement: 0.0001 for most pairs, 0.01 for pairs quoted in yen<\/td>EUR\/USD moving from 1.1000 to 1.1001 is 1 pip<\/td><\/tr>
Standard lot<\/td>100,000 units of the base currency<\/td>1 lot of EUR\/USD is \u20ac100,000<\/td><\/tr>
Mini lot<\/td>10,000 units (0.10 lot)<\/td>0.10 lot of EUR\/USD is \u20ac10,000<\/td><\/tr>
Micro lot<\/td>1,000 units (0.01 lot)<\/td>0.01 lot of EUR\/USD is \u20ac1,000<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

On a pair quoted in US dollars, one pip on one standard lot is worth about US$10. On 0.10 lots it is about US$1.<\/p>\n\n\n\n

Profit or loss \u2248 pips moved \u00d7 pip value per lot \u00d7 lots. Example: EUR\/USD rises 30 pips while you hold 0.5 lots long: 30 \u00d7 US$10 \u00d7 0.5 = US$150.<\/p>\n\n\n\n

Major, minor and exotic pairs<\/h2>\n\n\n\n