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What should I know to trade FX?
Two-sided prices, exchange-rate risk and the economic forces that can change one currency against another.
- 01Economy & context · beginnerRead guide
Exchange rates
An exchange rate is the price of one currency in units of another. Every quote is a pair, so a rise or fall must name which currency strengthened.
- 02Risk & returns · intermediateRead guide
Currency risk
Currency risk is the effect of exchange-rate changes on assets, liabilities or cash flows measured in another currency. Local asset return and home-currency return can differ sharply.
- 03Markets & trading · beginnerRead guide
What is the bid/ask spread?
The bid is the best current buying price. The ask is the best current selling price. The gap is the spread.
- 04Economy & context · beginnerRead guide
Interest rates
An interest rate is the price of borrowing or reward for lending over time, expressed under a stated convention. Different rates reflect term, currency, credit, liquidity and policy.
- 05Economy & context · beginnerRead guide
Central banks
Central banks manage monetary policy and core parts of the monetary and financial system under legal mandates. Their tools influence conditions but do not control every market price or economic outcome.
- 06Economy & context · beginnerRead guide
Inflation
Inflation is a sustained rise in a broad measure of prices, reducing the purchasing power of a unit of money. Different households and businesses experience different price baskets.
- 07Economy & context · beginnerRead guide
Economic growth
Economic growth is an increase in the inflation-adjusted output of an economy over time, commonly measured through real gross domestic product. It is an aggregate, not a complete measure of wellbeing.
- 08Economy & context · intermediateRead guide
Monetary policy
Monetary policy uses central-bank tools to influence inflation, demand and financial conditions under a legal mandate. Its effects travel through expectations, rates, credit, assets and currencies with lags.
- 09Economy & context · intermediateRead guide
Market sentiment
Market sentiment is a broad label for investors' prevailing risk appetite, expectations or positioning. It is inferred through surveys, prices or flows and has no single canonical measure.