Mechanics

Currency pair

Two currencies quoted against each other as a single tradeable instrument.

Every forex trade is an exchange of one currency for another, so instruments are quoted in pairs: EUR/USD, GBP/JPY, AUD/NZD. Buying the pair means going long the base currency and simultaneously short the quote currency.

Pairs are grouped into majors (containing the US dollar and a large economy), crosses (no dollar, such as EUR/GBP) and exotics (a major against a smaller or less liquid currency). Liquidity, spread and typical volatility differ sharply between the groups.

Taught in these lessons

What is a pip? — Forex Foundations
Lots & leverage — Forex Foundations
The bid, the ask & the spread — Forex Foundations
Choosing a timeframe — Charts & Execution
Trend and structure — Charts & Execution