🥬 CABBAGE MARKETS

As societies developed, metal coins and paper money were introduced to simplify trade. Later, banks and financial institutions started exchanging currencies between countries.

Modern currency trading developed after 1971 when currencies began floating freely against each other. Today the Forex market operates digitally and is the largest financial market in the world, with trillions of dollars traded every day.

Retail traders can now participate in global markets through online trading platforms from their computers or smartphones.

When you buy a currency pair, you expect the first currency to increase in value compared to the second currency.

For example, if you believe the Euro will strengthen against the US Dollar, you buy EUR/USD. If the price rises, you close the trade and earn profit.

Successful traders use analysis techniques such as chart analysis, market news, and trading strategies to predict price movements.

For most currency pairs, one pip equals 0.0001.

Example:
EUR/USD moves from 1.1000 to 1.1005.
This movement equals 5 pips.

Understanding pips is important because it helps traders calculate potential profit, loss, and risk before opening a trade.

Common lot sizes include:

Standard Lot = 100,000 units
Mini Lot = 10,000 units
Micro Lot = 1,000 units

Beginners usually trade micro or mini lots to reduce risk while learning how the market works.

Choosing the correct lot size is a key part of risk management.

Example:
Deposit = $100
Leverage = 1:100

This means you can control a trading position worth $10,000.

Leverage increases both potential profit and potential loss, which is why traders must use it carefully and apply stop-loss strategies.

Common order types include:

Market Order – opens a trade immediately at the current price.
Limit Order – opens a trade when the price reaches a chosen level.
Stop Order – activates when price moves beyond a certain level.

Using the correct order type helps traders follow a trading plan and avoid emotional decisions during fast market movements.