Forex Trading Basics: Pairs, Pips, Lots and Leverage Explained
Everything you need to start trading forex — currency pairs, pip values, lot sizes, leverage, and how brokers actually make money.
What Is Forex?
Forex (FX) is the global market for exchanging currencies. It trades $7T+ daily and is open 24/5.
Currency Pairs
Always quoted as base/quote. EUR/USD = 1.0850 means 1 EUR = 1.0850 USD.
- Majors: EURUSD, GBPUSD, USDJPY, USDCHF
- Minors: EURGBP, AUDJPY
- Exotics: USDTRY, USDZAR
What Is a Pip?
A pip is the smallest standard price move. For most pairs it is 0.0001. For JPY pairs it is 0.01. Calculate values with our pip calculator.
Lot Sizes
- Standard lot = 100,000 units
- Mini lot = 10,000 units
- Micro lot = 1,000 units
Use our lot size calculator for the correct lot per trade.
Leverage
Leverage of 1:30 means $1,000 controls $30,000. Powerful but dangerous — always size positions by risk, not leverage.
Related reads
A pip is the smallest price move in a currency pair. Here is what it means, how it is calculated, and how much one pip is worth.
Pip values change with pair, lot size, and account currency. This step-by-step guide teaches you exactly what a pip is worth and how to size trades correctly on any forex pair.
Learn how to use a forex lot size calculator with real examples for majors, JPY pairs and cross-pairs. Formula, pip values and the exact professional workflow.