Free ebook on forex market structure, currency pairs, trading costs, leverage, orders, and risk-based position sizing.
Free ebook content
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Forex Market Structure: How Currency Trading Works in Practice
+ Exercise: In an OTC forex market, why can two traders using different brokers see slightly different EUR/USD quotes at the same time?
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Currency Pairs and Quotes: Base, Quote, Majors, Minors, and Crosses
+ Exercise: On a trading platform, EUR/USD shows Bid 1.1000 and Ask 1.1002. Which statement correctly describes what happens if you buy and then immediately sell?
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Pips, Points, Spreads, and Costs: Measuring Movement and Paying for Trading
+ Exercise: A trader wants to compare two forex account types using an all-in cost measured in pips. Which method correctly calculates the all-in cost for the same pair and lot size?
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Lots and Position Size Basics: From Micro Lots to Standard Lots
+ Exercise: A trader with a $5,000 USD account risks 1% per trade on EUR/USD and plans a 25-pip stop-loss. Using the rule of thumb that 1.00 lot ≈ $10 per pip on EUR/USD, what position size is closest to the target risk?
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Leverage and Margin: Power Tool, Not a Profit Strategy
+ Exercise: A trader wants to reduce the chance of liquidation even if a trade idea is eventually correct. Which approach best addresses this risk based on leverage and margin concepts?
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Order Types and Trade Control: Entries, Stops, Limits, and Slippage
+ Exercise: In a fast-moving market, which statement best describes the trade-off between using a market order, a limit order, and a stop entry order for entering a trade?
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Macroeconomic News and Forex: What Moves Currencies Day to Day
+ Exercise: When a high-impact economic release is approaching for a currency pair you trade, which action best follows the recommended risk-control approach?
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Risk Management Foundations: Defining Risk Per Trade and Maximum Drawdown
+ Exercise: Why is defining risk per trade as a percentage of current equity generally preferred over risking a fixed dollar amount?
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Position Sizing Step-by-Step: Calculating Lot Size From Stop-Loss and Risk
+ Exercise: In Scenario C (Equity $30,000, Risk 0.5%, Stop 75 pips, Pip Value $7.80 per 1.00 lot, lot increment 0.10), what rounded lot size keeps the maximum loss at or below the planned Dollar Risk?
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Realistic Expectations for Beginners: Process Metrics Over Profit Targets
+ Exercise: A beginner forex trader wants to set realistic expectations and improve faster. Which approach best fits a process-metrics focus rather than profit targets?
About the free ebook
Forex Trading Basics: Market Structure, Currency Pairs, and Risk Control
This free ebook introduces the essential mechanics of the foreign exchange market and the discipline required to approach currency trading responsibly. Learn how forex transactions work, why currencies are quoted in pairs, and how market prices respond to liquidity, economic data, and global events.
Understand the building blocks of a forex trade
Explore base and quote currencies, major and minor pairs, crosses, pips, points, spreads, and common trading costs. The ebook explains how lot sizes, leverage, and margin affect exposure, helping readers distinguish between buying power and actual risk.
Build control into every trade
Discover practical order types, including market, limit, stop, and stop-loss orders, alongside an explanation of slippage. Strong emphasis is placed on risk per trade, maximum drawdown, and position sizing based on a predefined stop-loss rather than on a hoped-for profit.
Connect market movement to economic conditions
See how inflation reports, interest-rate decisions, employment data, and central-bank communication can influence currencies day to day. The focus is on understanding possible market drivers, not predicting every move.
Develop realistic expectations
The ebook encourages a process-first mindset: define risk, calculate position size, record decisions, and assess consistency. It is an educational resource and does not promise returns or provide personalized investment advice.
What you will be able to examine
- How a currency quote expresses relative value
- How spreads and pip values affect trading costs
- How leverage can increase both gains and losses
- How to calculate a position size from account risk and stop distance
- How process metrics can support more disciplined decisions
How do pips and spreads affect the cost of a forex trade?
A pip measures price movement, while the spread is the gap between bid and ask prices. The spread is an immediate trading cost that a position must overcome.
How is forex position size calculated from a stop-loss?
Divide the amount you are willing to risk by the monetary value of the distance between entry and stop-loss, then select the appropriate lot size.
What is the difference between leverage and margin in forex?
Leverage increases market exposure relative to account funds. Margin is the amount of funds a broker sets aside to support that leveraged position.
This ebook includes:
10 content chapters
Digital certificate of course completion (Free)
Exercises to train your knowledge
100% free, from content to certificate
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