Independent market education

Forex Trading Explained Made Simple

Forex trading explained for people who think in years rather than minutes: how currency and gold prices are quoted, what a position really costs to hold, and where the risks sit before anything goes wrong. Shares and crypto get the same unhurried treatment.

We are not a broker or an exchange. GalaxyHedge is an information website. There are no accounts to open here, nothing to deposit and nothing to trade, and nobody from GalaxyHedge will ever message you with an investment offer.

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Global network of interconnected glowing nodes

Forex trading explained in four ideas

Almost everything that confuses newcomers to currencies comes back to one of these four building blocks. Learn them once and every later guide on this site reads more easily.

1. A price is a ratio

EUR/USD at 1.0850 means one euro costs 1.0850 US dollars. You are always buying one currency and selling the other at the same moment.

2. Pips and lots set the scale

A pip is 0.0001 on most pairs and 0.01 on yen pairs. A standard lot is 100,000 units, so on dollar-quoted pairs one pip is worth $10 per lot.

3. Leverage borrows exposure

Margin is the deposit a broker holds while your position is open. Retail caps in the UK and EU stop at 30:1 on major pairs and 20:1 on gold.

4. Time has a price

Positions held past 17:00 New York time pay or earn a daily swap. For anyone holding for weeks, that charge can outweigh the spread.

Illustrative example. Buy 0.1 lot (10,000 euros) of EUR/USD at 1.0850 and sell at 1.0900. The price has moved 50 pips, each worth $1 at this size, so the gain is $50 before costs. Had the pair fallen to 1.0800 instead, the loss would have been the same $50. The full walk-through is in our forex guide.

Which markets are trading right now

Your local time: –

Currency and gold markets run almost around the clock on weekdays; stock exchanges keep office hours; crypto never stops. Status is worked out in your browser from each market's regular hours and ignores public holidays.

MarketNowRegular hours (local time)Guide

ForexEUR/USD, GBP/USD, USD/JPY–Sunday 17:00 to Friday 17:00, New YorkForex guide

Spot goldXAU/USD–Sunday 18:00 to Friday 17:00, New York, with a daily one-hour breakGold pip values

New York stocksNYSE, Nasdaq–Monday to Friday 09:30 to 16:00, New YorkDow basics

London stocksLondon Stock Exchange–Monday to Friday 08:00 to 16:30, LondonStock guide

Frankfurt stocksXetra–Monday to Friday 09:00 to 17:30, FrankfurtEuropean shares

Tokyo stocksTokyo Stock Exchange–Monday to Friday 09:00 to 11:30 and 12:30 to 15:30, TokyoMarkets explained

CryptoBitcoin, ether, USDT–24 hours a day, 7 days a weekCrypto guide

Three corners of the library

GalaxyHedge leans towards currencies and gold, because they sit underneath every international portfolio, but the other two corners matter just as much for a long-term investor.

British pound coin and a US dollar coin facing each other on a reflective surface

Currencies and gold

How forex trading worksQuotes, sessions and a full worked trade.
Managing a forex accountRisk per trade, margin level and record keeping.
Margin on gold and currenciesWhat 20:1 and 30:1 really lock up.

Financial district street with tall skyscrapers at dusk

Shares and indices

The stock market for beginnersShares, dividends, orders and settlement.
The Dow Jones Industrial AverageWhy 30 companies and a divisor make headlines.
How the major markets differExchanges, dealers and opening hours side by side.

Trader wearing a VR headset surrounded by holographic crypto charts

Crypto and stablecoins

How crypto worksKeys, wallets, blockchains and custody.
What Bitcoin isFixed supply, halvings and what gives it a price.
USDT explainedNetworks, reserves and the risks of a stablecoin.

Calculators with the working shown

Each tool runs entirely in your browser and prints its formula, so you can check the answer with a pencil.

Pip valueWhat a one-pip move is worth on a currency pair or on gold.units × pip size, in USD Margin and leverageThe deposit a leveraged position locks up under a given cap.position value ÷ leverage Lot sizeSize a position from the loss you can accept, not from a hunch.risk $ ÷ (stop pips × pip value)Crypto profit and lossThe real result of a buy and a sell once both fees are taken.coins × sell price − fees − cost

Why a patient investor should understand currencies

You do not have to trade forex for exchange rates to affect you. Anyone who owns foreign shares, an international fund or gold is exposed to currency moves, whether they chose to be or not. A European share portfolio that is flat in euros can still lose value for a dollar-based investor if the euro weakens, and gold is priced in dollars wherever you live.

That is the thinking behind our name. To hedge is to reduce an exposure you do not want, and the first step is seeing it clearly. Our guides explain how currency risk enters a portfolio, what it costs to offset, and why short-term leveraged trading is a very different activity from long-term investing, with very different odds.

The forex market is also the largest market on earth by turnover: the Bank for International Settlements measured average trading of $9.6 trillion a day in April 2025, with the US dollar on one side of 89.2% of all trades. Size brings deep liquidity on the major pairs, but it does not make the market any easier to beat.

Your reading route

Five guides, in order, that take you from the basics to protecting yourself.

Markets explained
How the big markets differ, and why that matters for a patient investor.
Forex guide
Quotes, pips, lots, leverage and sessions, one idea at a time.
Trading fees
Spreads, swaps and conversion fees that add up over years.
Choosing a broker
Ten checks on any broker before money leaves your bank.
Scam warning signs
The warning signs behind most investment and crypto fraud.

Questions newcomers ask first

Is forex trading just gambling?

Exchange rates respond to real economic forces, so it is not a lottery. But short-term leveraged trading has high costs and professional competition, and most private traders find the odds poor. Understanding that before you begin is the point of this site.

Am I exposed to currencies if I never trade them?

Very probably. Foreign shares, global funds, gold, holidays and imported goods all carry exchange-rate exposure. Our forex guide shows how a falling currency can erase a gain in a flat share portfolio.

How much could I lose?

With leverage, far more than the move in the price suggests. At 30:1, a 3.3% move against you equals the whole deposit behind the position. Use the margin calculator and lot size calculator before any real trade.

What GalaxyHedge is, and is not

GalaxyHedge is an independent education website. We explain how exchanges, brokers and markets work; we are not one of them. We cannot open or manage an account, accept money, execute an order, give personal investment advice or recover lost funds, and we do not rank or promote particular firms, coins or shares.

Read who we are, how we check our facts and our disclaimer.

Things we will never do

Ask you to deposit money or send crypto
Contact you first about an investment
Offer signals, bonuses or managed accounts
Ask for a password or wallet recovery phrase