Please note ThinkMarkets does not provide CFD services to residents of the US.

Learn To Trade
Indicators & Chart Patterns

Deepen your knowledge of technical analysis indicators and hone your skills as a trader.

Find your detailed guides here
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Learn More
Trading Glossary

From beginners to experts, all traders need to know a wide range of technical terms. Let us be your guide.

Learn more
Knowledge Base

No matter your experience level, download our free trading guides and develop your skills.

Learn more
Learn To Trade

Trade smarter: boost your skills with our training resources.

Create a live account
Market Analysis
Market News

All the latest market news, with regular insights and analysis from our in-house experts

Learn more
Economic Calendar

Make sure you are ahead of every market move with our constantly updated economic calendar.

Learn more
Technical Analysis

Harness past market data to forecast price direction and anticipate market moves.

Learn more
Live Webinars

Boost your knowledge with our live, interactive webinars delivered by industry experts.

Register now
Special Reports

Engaging, in-depth macroeconomic analysis and expert educational content from our in-house analysts

Learn more
Market Analysis

Harness the market intelligence you need to build your trading strategies.

Create a live account
About ThinkMarkets

Check out our sponsorships with global institutions and athletes, built on shared values of excellence.

Learn more
About Us

Find out more about ThinkMarkets, an established, multi-award winning global broker you can trust.

Learn more

Discover a range of rewarding career possibilities across the globe

Apply now
ThinkMarkets News

Keep up to date with our latest company news and announcements

Learn more
Trading Infrastructure

When it comes to the speed we execute your trades, no expense is spared. Find out more.

Learn more
Contact Us

Our multilingual support team is here for you 24/7.

Learn more
About ThinkMarkets

Global presence, local expertise - find out what sets us apart.

Create a live account
Log in Create account

How to trade FX

A step-by-step guide on how to get started with FX trading


Trading basics

Compared to other financial markets, the FX market does not have a central exchange or a physical location. It operates 24 hours a day via a global network of banks, businesses and individual traders. This means, currency exchange rates fluctuate in value against one another around the clock, offering multiple trading opportunities to capitalize on.

Start trading FX in 6 steps


1. Pick your FX pair
Choosing which FX pairs to trade is the first decision you will have to make as an FX trader. At ThinkMarkets, we offer a wide selection of major, minor and exotic pairs to select from. New traders tend to start with currencies they are familiar with before moving on to finding opportunities in currencies they have less exposure to.

2. Decide whether to buy or sell
After choosing your market, you have to determine the current trading price and the direction in which you think the market is going to move. FX pairs are quoted as one currency (base currency) versus another (quote currency), therefore:

- If you think the base currency will strengthen against the quote currency or the quote will decline versus the base, you buy the pair.

- If you think the base currency will weaken against the quote or the quote will appreciate versus the base, you sell. 

Each FX pair has two prices. The first is the bid or sell price, while the second is the ask or buy price. The difference between the two quoted prices is the spread, which is your trading cost.


3. Add orders
An order is an instruction to trade automatically at a future time when exchange rates meet a particular pre-determined level. Stop-loss and limit orders are used to make sure that profits are locked in and losses are minimized.

4. Monitor your trading position
In an open position, your profit and loss (P&L) fluctuates with each market price movement. That’s why it’s important to monitor your P&L in real time. This way, you can easily add or close trading positions when necessary.

5. Close your trading position
Closing a trade is similar to opening a position. If you initially bought 5 units, you need to sell the same number of units upon closing. When you close a trade, your profits and losses are reflected right away in your trading account.

Are you ready to trade FX live?

Create account

FX trading examples

To help you better understand how FX trading works, here are a couple of FX trading examples.

Every month, the economic calendar is filled with economic events. One of the most highly anticipated bits of news is the release of the NFP or Non-Farm Payroll figures. It is reported by the US Bureau of Labor Statistics on a monthly basis, offering traders valuable insight into the performance of the US economy.

Going long (buying) EUR/USD

Here’s an example of a long trade. The US job market seems to stall. You think the level of the Non-Farm Payroll (NFP) will be below the estimates of analysts and expect the US Dollar to weaken against the Euro. For that reason, you decide to buy 1 Lot ($100,000) of EUR/USD at 1.2101, which corresponds to a $10 stake per pip movement.

The report is released and the NFP headline number prints weaker than the experts estimated, causing the US dollar to slump. The EUR/USD pair now trades at 1.2152 and you decide to close the position. You opened the trade at 1.2101 and sold at 1.2152. The difference of 51 pips is your profit ($510).


EUR/USD trading example (long)



Going short (selling) USD/JPY

Here’s an example of a short trade. Remember when we said that it is the fourth decimal point we use to calculate profit and loss? Pairs that include the Japanese Yen (JPY) are the exemption to the rule. Here we look at the second decimal instead. 

Let’s assume that you open the USD/JPY 1 hour chart looking for trading opportunities early in the morning. The pair is trading at 113.63 and your technical indicators suggest a high probability for the market to move lower. 

You sell 1 mini lot ($10,000), which corresponds to a $1 stake per pip movement. This time you decide to add stop-loss and take-profit orders to your position, so that your risk is managed while you are at work. You set your take-profit at 113.27 and the stop-loss at 114.24. 


USD/JPY trading example (short)

You are back from the office and straight to your account to check what happened with your position. Your account balance is up by $61. The market moved lower, triggering the take-profit and cancelling the stop-loss. 

Back to top