Forex for Absolute Beginners: A Simple, Safe Start (2025 Guide)
Reading time: ~8 minutes • Educational only, not financial advice.
If you’re new to Forex, start here. This guide explains what the market is, how to avoid common mistakes, how to size your risk, and a simple routine you can follow from day one.
1) What is Forex?
Forex (Foreign Exchange) is the market where currencies are traded in pairs (EUR/USD, GBP/USD, XAU/USD for Gold, etc.). Price moves because of supply/demand, news and liquidity during trading sessions.
- Pair: EUR/USD = euro vs US dollar
- Pip: Smallest price move (e.g., 0.0001 on EUR/USD)
- Lot: Position size (0.01 = micro, 0.10 = mini, 1.00 = standard)
- Spread: Broker’s difference between buy/sell price
- SL / TP: Stop-loss / Take-profit
2) The Golden Rule: Risk First
Protect your account so you can keep learning.
- Risk max 2% per trade (beginners can use 1%).
- Always set Stop-loss (SL) before entry.
- Target at least 1:2 risk-reward (risk 1 to make 2).
Quick position sizing example
Account = ₹10,000 • Risk = 1% = ₹100 • SL distance = 50 pips
Position value per pip you can afford ≈ ₹100 ÷ 50 = ₹2 per pip.
Choose a lot size that makes ~₹2/pip on your pair (your broker’s pip value table will help).
3) Tools You Actually Need
- Broker + Demo Account: Practice with virtual money first (2–4 weeks).
- Charting: TradingView (free) is enough for drawing levels.
- Journal: Google Sheet or notebook to log every trade (why, where, result, screenshot).
4) A Simple Starter Strategy (Price Action)
Keep it boring and repeatable. Focus on 1–2 markets (e.g., XAUUSD & EURUSD) and 1–2 sessions (London or early New York).
- Mark structure: On H1/H4 mark key support/resistance zones.
- Wait for reaction: On M15/M5, wait for wick rejections or a break-and-retest back into your level.
- Plan the trade: SL goes beyond the invalidation point (above/below the zone). TP = 2× your risk distance.
- Execute: Enter only when your trigger candle closes. No guessing mid-candle.
- Manage: Move SL to breakeven after price covers 1× risk. Let winners run to target.
Example: Gold revisits a H1 support, prints a long lower wick on M15, then breaks a minor M5 swing high and retests it. That retest is your trigger. SL below the wick, TP 2× risk.
5) Your First 2 Weeks (Routine)
Week 1
- Trade demo only.
- Pick 1–2 hours daily (consistency beats long hours).
- Take max 1 trade/day. Quality > quantity.
- Write a one-page plan: sessions, pairs, entry signal, SL/TP rule.
Week 2
- Same rules, but start counting stats: win rate, average RR, max drawdown.
- Review losing trades: was the setup valid or emotional?
- If you kept discipline 10 days straight, consider a small live risk (0.5% per trade).
6) Common Beginner Mistakes (Avoid These)
- No stop-loss: One bad move can wipe weeks of work.
- Switching strategies daily: Give one approach 20–30 trades before judging.
- Over-leveraging: Big lot sizes feel exciting, but kill accounts.
- Revenge trading: Take a break after 2 losses in a day.
- Trading all sessions: Pick one session and learn its rhythm.
7) Simple Trading Checklist (Print This)
- Is there a clear level on H1/H4?
- Do I have a clean trigger on M15/M5 (wick rejection / break-retest)?
- Is my SL at a logical invalidation (not random)?
- Is RR ≥ 1:2?
- Is the session liquid (London/NY overlap)?
- Have I journaled the plan before entry?
8) Journaling Template (Copy/Paste)
Date:
Pair:
Direction:
Entry / SL / TP:
Reason to enter:
Session:
Emotions (before/after):
Result:
Lesson:
Screenshot link:
9) When to Go Live
- At least 30 demo trades with rules followed.
- Drawdown < 10%, win rate stable (even 45–50% is OK with 1:2 RR).
- Zero revenge trades in the last 2 weeks.
10) Final Thoughts
Forex rewards patience and process, not prediction. Start small, track everything, and focus on risk before entries. As you build discipline, results follow.
Disclaimer: This article is for education only. Trading involves risk. Past performance does not guarantee future results.