Market Library
Understand how currency trading works, what currency pairs, pips, lots and leverage are, and why trillions of dollars move daily through the Forex market.
Market Library
Forex, or the Foreign Exchange Market, is the global currency market.
Banks, companies, governments, funds and investors trade currencies every day for international commerce, investments, currency protection and capital movement.
With more than US$ 7 trillion traded daily, Forex is the largest financial market on the planet.
01
Global market
02
More than US$ 7 trillion per day
03
Works 24 hours
04
High liquidity
How currency pairs work
In Forex, you always trade one currency against another. When you buy one currency, you automatically sell another.
EUR/USD = 1.1000
EUR
Base currency
USD
Quote currency
If EUR/USD is at 1.1000, it means that 1 euro is worth 1.10 dollars. If price rises, the euro is gaining strength against the dollar.
Euro against the US dollar
British pound against the US dollar
US dollar against the Japanese yen
Australian dollar against the US dollar
US dollar against the Canadian dollar
1.1000 -> 1.1001
A pip is the smallest common variation used to measure price movements in Forex. Pips are used to calculate gains, losses, stop loss and risk management.
0.01 / 0.10 / 1.00
The lot defines the financial size of the trade. The larger the lot, the larger the financial impact of each market move.
US$ 1,000 x 1:100
Leverage allows you to control positions larger than the capital available in your account. With US$ 1,000 and 1:100 leverage, the operational capacity may reach US$ 100,000.
Higher leverage does not mean guaranteed profit. It also increases risk significantly.
How lot size impacts your account
The larger the lot, the greater the potential gain and also the greater the risk.
| Capital | Lot | Move | Result |
|---|---|---|---|
| US$ 1,000 | 0.01 | 100 pips | US$ 10 |
| US$ 1,000 | 0.10 | 100 pips | US$ 100 |
| US$ 1,000 | 1.00 | 100 pips | US$ 1,000 |
Major currency pairs
EUR/USD
Highest liquidity in the world
GBP/USD
High volatility
USD/JPY
Influenced by the Bank of Japan
AUD/USD
Linked to commodities
USD/CAD
Linked to oil
USD/CHF
Global protection currency
Global Forex sessions
The market works 24 hours a day. The overlap between London and New York usually concentrates the highest liquidity and movement.
How Formiga, Lobo and Harpia use Forex
Operational structure
Access the platforms used in our operational structure for Forex and crypto assets.
Forex broker
Access the Forex platform used by Varejo Investidor to follow currencies, gold, oil, indices, and global markets.
Open FXPro AccountCrypto broker
Access the platform used to trade crypto assets inside a global operational structure.
Open Crypto accountOpen your Forex account
Click the banner to access the broker in the correct language.
Market Library
Deepen your knowledge, follow economic analysis and evolve inside the Formiga, Lobo and Harpia methodology.
Disclaimer
Varejo Investidor content is provided for educational and informational purposes only. The analyses, signals, examples, mentorships, consulting services, and materials presented do not constitute individualized investment advice, personalized financial consulting, a promise of profitability, or a guarantee of results. Operations in Forex, crypto assets, commodities, indices, and other markets involve risk and may result in losses. Each user is responsible for their own financial decisions and should evaluate their reality, goals, and risk tolerance before trading or investing.