Reading the Market
Currencies trade in pairs: EUR/USD at 1.0850 means one euro buys 1.0850 dollars — buying the pair is long euro, short dollar. Majors (EUR/USD, GBP/USD, USD/JPY) carry the tightest spreads. A pip is the fourth decimal (second for yen pairs); a standard lot ($100k notional) makes a pip worth ~$10, a micro lot ~$0.10 — micro lots are how beginners survive the learning curve.
Leverage: The Defining Risk
Brokers offer 30:1 (EU/UK retail cap) to 500:1 offshore. At 100:1, a 1% adverse move wipes the margin behind a position — and currencies move 0.5-1% on normal days. Regulated-jurisdiction accounts include negative balance protection; offshore high-leverage accounts may not. The leverage number that matters isn't the maximum offered but what your position sizing actually uses: professionals rarely exceed 5-10:1 effective.
Sessions and Costs
Liquidity follows the sun: London (~8:00-16:00 GMT) and the London-New York overlap carry the tightest spreads and biggest moves; Asian hours suit range strategies. Costs = spread + commission + overnight swap (interest differential, charged nightly on held positions). All-in cost comparison across brokers is exactly what our forex platform audits measure.