What is forex
Forex (foreign exchange) is the market where currencies are bought and sold against each other. It is the largest financial market in the world and trades around the clock from Monday to Friday. Traders try to profit from changes in exchange rates, for example the price of the euro in US dollars.
You trade through a broker, using a platform such as MetaTrader 5 (MT5). The broker holds your money and carries out your trades.
Currency pairs
Currencies are always quoted in pairs, such as EUR/USD. The first currency is the base, the second is the quote. A price of 1.0850 means one euro costs 1.0850 US dollars.
- Buy (go long) if you expect the base currency to rise against the quote.
- Sell (go short) if you expect it to fall.
- A pip is a small price step, usually the fourth decimal place (0.0001) on most pairs.
- A lot is the trade size. One standard lot is 100,000 units of the base currency; 0.01 is a micro lot of 1,000 units. On EUR/USD, a 0.01 lot moves about 0.10 US dollars per pip.
Many brokers also offer gold (XAU/USD), indices and other markets on the same platform.
Leverage
Leverage lets you control a larger trade than the money in your account. With 1:100 leverage, 1,000 US dollars can control a 100,000 dollar position.
Leverage multiplies losses just as much as gains. A small price move against you can wipe out a large share of your balance. Higher leverage is not better; it is riskier.
Margin
Margin is the part of your balance the broker sets aside to keep a trade open. Free margin is what is left for new trades.
- Equity is your balance plus or minus the profit or loss on open trades.
- If equity falls too close to the margin in use, the broker may issue a margin call.
- If it keeps falling, the broker can close your trades automatically (a stop-out), often at a loss.
Expert Advisors (EAs)
An Expert Advisor is a trading robot: a program that follows set rules to decide when to open and close trades. It removes emotion and can watch the market all the time, but it only does what its rules say. It can and will have losing trades and losing periods.
Risk management
Good risk management matters more than any single trade.
- Only trade with money you can afford to lose.
- Start with the smallest lot size and a demo account while you learn.
- Risk a small part of your balance on each trade, and limit how many trades are open at once.
- Use a stop-loss, and understand that it can be filled at a worse price in fast markets.
- Expect losing runs. Do not raise your lot size to win back losses.
- Check your account regularly, even when a robot is trading for you.
How automated trading works with Exhaura AI
- You connect your own MT5 broker account inside the Exhaura AI app.
- You choose the symbol, lot size and number of trades per signal.
- When the bot produces a signal, the app sends the trade to your broker, with a stop-loss and take-profit when the signal includes them.
- Your broker carries out the trade on your account. You can watch it and stop the bot at any time.