Common questions about Forex

What is the Forex market?
Forex (foreign exchange) is the global market for exchanging currencies, quoted in pairs such as EUR/USD. Much of it operates over the counter rather than on one central exchange. The BIS 2025 survey recorded average OTC FX turnover of $9.5 trillion per day in April 2025, across spot and derivative transactions. This is a survey-period average, not a live daily figure.

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How much money do you need to start?
You can learn the theory and practise calculations without depositing money. Demo accounts use virtual funds. For live trading, the minimum deposit, smallest permitted position, margin and costs depend on the provider and product. A low account-opening minimum does not show that a position is affordable or suitable. There is no single starting amount or risk percentage that is right for everyone.

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Can you actually make money on Forex?
Profits are possible, but they are not guaranteed. Leveraged Forex and CFD trading can cause rapid losses. In analyses cited by ESMA in March 2018, 74–89% of retail CFD accounts across the EU jurisdictions studied typically lost money. That historical range is not a current result for every provider: check the relevant provider’s latest risk warning and loss percentage.

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What is a pip?
A pip is a conventional unit of exchange-rate movement: usually 0.0001, or 0.01 for pairs quoted in Japanese yen. Quotes can also show fractions of a pip. A move in EUR/USD from 1.0850 to 1.0851 is one pip. For a position of 100,000 EUR, that pip is worth $10 before costs. Its cash value depends on the pair and position size; conversion is needed if the account currency differs from the quote currency.

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What is leverage?
Leverage allows exposure larger than the margin required to open a position. At 30:1, $30,000 of exposure requires $1,000 of initial margin in a simplified example. With that exposure held fixed, a 1% adverse price move means a $300 loss before costs. For a CFD, margin is collateral for the contract; it does not mean you receive a cash loan. Margin requirements, close-out rules and protections depend on the product, provider and jurisdiction.

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What is a CFD?
A CFD (contract for difference) is a derivative agreement with a provider to settle the change in an underlying price between opening and closing a position. You do not own the underlying currency or share. The outcome also reflects position size, direction and costs. CFDs use margin and leverage, so losses can develop quickly. Availability and retail-client protections vary by country. See ASIC’s Moneysmart explanation of CFDs.

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Jarosław Wasiński

The person behind the articles

Jarosław Wasiński

Editor-in-chief of MyBank.pl. I have run the portal since 2004 and analysed the Forex market since 2007. Here, I explain how the market works and the questions worth asking when you begin.

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