What is a Forex Currency Pair

💱 What is a Forex Currency in General

Currencies (such as USD or EUR) in the Forex market are traded in pairs, meaning you trade one currency against another. Therefore, Forex currencies are always quoted in terms of their value relative to another currency (e.g., USD/EUR).

Currency Pairs

Currencies are traded in pairs, such as EUR/USD, GBP/JPY, or USD/JPY. The first currency is called the base currency, and the second is the quote currency.

Exchange Rate

This is the value of one currency in terms of another. For example, EUR/USD = 1.0800 means 1 Euro is equal to 1.0800 US Dollars.

Base / Quote Currency

The first currency in a pair is called the base currency, and the second is called the quote or counter currency. For example, in the EUR/USD pair, EUR is the base currency and USD is the quote currency.

The major Forex pairs are:

EUR/USD, 2) GBP/USD, 3) USD/JPY, 4) AUD/USD, 5) USD/CAD, and 6) USD/CHF

💲MORE CURRENCY DEFINITIONS

Currency Symbols

Currency symbols represent specific currencies, for example, EUR for Euro or AUD for Australian Dollar.

Currency Conversion

In the Forex market, currency conversion is the exchange of one currency for another.

Currency Option

Currency options are contracts that give the right to buy or sell one currency for another at an agreed rate within a specified time period.

Currency Forecast

A currency forecast is the prediction of future movements in a currency's value.

Going Long (Buying)

You buy the base currency and sell the quote currency, expecting the base currency to rise in value.

Going Short (Selling)

You sell the base currency and buy the quote currency, anticipating the base currency will fall in value.

Pip (Percentage in Point)

The smallest price movement in most currency pairs, typically the 4th decimal place (0.0001). For pairs involving the Japanese Yen (JPY), it's usually the 2nd decimal place (0.01).

Lots

Forex trades are measured in lots: