Mechanics
Base currency
The first currency in a pair — the one being priced.
In EUR/USD, the euro is the base currency and the dollar is the quote currency. The price tells you how many units of the quote currency one unit of the base is worth: EUR/USD at 1.0950 means one euro buys 1.0950 dollars.
Position sizes are expressed in units of the base currency, which is why a standard lot of EUR/USD is 100,000 euros rather than 100,000 dollars. Going long the pair means buying the base and selling the quote.
Taught in these lessons
- Lots & leverage — Forex Foundations
- The bid, the ask & the spread — Forex Foundations
- Correlation between pairs — Risk & Position Sizing
- Patience & the discipline of doing nothing — Psychology & Longevity
- Building a routine that lasts — Psychology & Longevity
Related terms
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