I walked a friend through his first FX platform a while back, a guy who had traded perps for two years, and the surprising part was how little of the actual trading needed explaining. He could read a book, he understood leverage, he had been liquidated enough times to respect a stop. What slowed him down was pure vocabulary. Pips, lots, quote conventions, session behavior. FX is the market crypto borrowed most of its structure from, so nearly everything maps onto something a perp trader already knows. The mapping just does not seem to be written down in one place, so here it is.
The quote is a trading pair, because that is literally what it is
EUR/USD at 1.0850 means one euro buys 1.0850 US dollars. Base currency on the left, quote currency on the right, exactly like BTC/USDT. Going long EUR/USD means you are long euros and short dollars at the same time, and this is the part crypto teaches well. Anyone who has held an ETH/BTC position understands that every pair is a relative bet and that you can be right about one leg and still lose money on the pair.
The units are where it gets foreign. A pip is the conventional increment of price movement, and for most pairs it is the fourth decimal place, 0.0001. EUR/USD moving from 1.0850 to 1.0862 is a 12 pip move. The main exception is yen pairs, where a pip is the second decimal place, 0.01, because the yen trades in much smaller units per dollar. Most platforms also quote a fifth decimal, sometimes called a pipette, which is a tenth of a pip. Functionally a pip is the tick everyone talks in, the way crypto people talk in percentage moves or round dollar levels.
One adjustment worth making early: FX people think in pips rather than percent. An 80 pip day in EUR/USD counts as a lively session, and it works out to roughly 0.7 percent. If you are used to alts doing that before breakfast, the raw movement will look boring. Leverage is what makes it not boring, and it is also the main way people coming from crypto hurt themselves.
Lots are contract size, and pip value is how you size a trade
Crypto sizing is easy because everything quotes in dollars and you can buy 0.0137 of a coin. FX positions come in lots. A standard lot is 100,000 units of the base currency, a mini lot is 10,000, and a micro lot is 1,000. For pairs where USD is the quote currency the arithmetic lands clean: one standard lot makes each pip worth about 10 dollars, a mini lot about 1 dollar, a micro lot about 10 cents. For crosses like EUR/GBP the pip value comes out in the quote currency and gets converted, but every modern platform shows you the number.
The sizing routine that keeps accounts alive is the same one good perp traders already run, with pips swapped in for percent:
- Pick the dollar amount you are willing to lose if the trade fails. Say 1 percent of a 10,000 dollar account, so 100 dollars.
- Place the stop where the chart says it belongs rather than where your preferred size can afford it. Say 50 pips away.
- Divide risk by stop distance to get the pip value you can carry. 100 divided by 50 is 2 dollars per pip.
- Convert to lots. Two dollars a pip is two mini lots, or 0.2 standard lots on a USD-quoted pair.
Leverage never appeared in that calculation, and it should not. This is the failure mode I see most with crypto traders crossing over. Offshore brokers advertise 200:1 or 500:1, regulated caps in the US and Europe sit around 50:1 and 30:1 on majors, and people quietly treat the cap as a suggested position size. Leverage in FX is a margin requirement, the same as on a perp venue. Your actual risk is stop distance times pip value, and the broker's headline number has nothing to do with it.
Sessions matter in a way a 24/7 book never taught you
FX trades around the clock five days a week, but open and liquid are two different conditions. Liquidity follows banking hours around the planet, Sydney and Tokyo first, then London, then New York, and the overlap between London and New York during the US morning is historically the deepest window of the day. Crypto has session rhythms too if you squint at hourly volume, but nothing this sharp, because in FX the dealers who make the prices genuinely go home.
In practical terms, yen pairs do most of their honest moving during Tokyo hours and around the London open. EUR and GBP pairs wake up when London opens and often set the day's range within a few hours. Anything driven by the dollar, which is most of the market, moves hardest in the New York morning, especially around scheduled economic data. The dead zone after New York winds down and before Tokyo gets going is where spreads widen and stops get run cheaply. Spreads also blow out around the daily rollover at 5 pm New York time, so resting orders through that window tend to fill worse than the chart implies.
Then there is the weekend, which perps never prepared you for. Spot FX closes Friday evening New York time and reopens Sunday evening. News that lands in between shows up as a gap at the open, and a stop resting inside the gap executes at the reopen price rather than at your level. That one difference should change how much size you carry into a Friday close.
Retail spot FX behaves more like a perp than like spot
Here is the piece almost nobody explains. Retail spot FX positions do not settle, they roll. Hold through 5 pm New York and the broker rolls the position to the next value date, crediting or debiting swap, which reflects the interest rate differential between the two currencies. If that sounds like funding on a perp, it should, because it plays the same economic role. Long the higher yielding currency and you typically collect a little every night, short it and you pay. Wednesdays usually carry a triple charge because spot settlement conventions push the weekend's interest into midweek. Carry traders build entire strategies out of this, roughly the way crypto people farm funding rates.
The counterparty picture also rhymes with crypto more than equity people tend to admit. There is no central exchange for spot FX. Your broker either takes the other side of your trade or routes it to dealers, quotes can be pulled or requoted, and spreads vary meaningfully by venue. Evaluating broker execution quality is a real skill, much like evaluating a CEX or a perp DEX, and it matters more than most feature comparisons.
If you want a starting routine, mine would be short. Trade one pair, EUR/USD, on a demo account. Do the pip value math by hand for two weeks before letting the platform do it. Trade only the London and New York mornings. Log every fill against where the chart said you entered. We built Blockcircle's backtester to run on both crypto and traditional market data partly because this crossover keeps happening in both directions, and testing a simple session filter on a few years of data will teach you more about FX liquidity than any explainer, including this one.