This chapter presents some of the essentials that one must know when one starts trading the forex market. The forex market is the largest financial market in the world, trading in excess of USD4 trillion in a single day. Although hundreds of currencies change hands every day, most of the trading centers on seven major currency pairs. This chapter discusses the yen factor, which quotes forex prices in two decimal places as opposed to the normal four and it explains the value of a pip and how margin and leverage affect trades. The higher the leverage employed, the smaller the margin required to trade one standard lot. Leverage is a double-edged sword. Although it helps to magnify a trader's gains, it can also amplify a trader's losses. Hence, it is imperative that traders fully understand the pros and cons of leverage before deciding the appropriate amount of leverage to employ.