Trading Currency Pairs

Forex trading involves trading currency pairs, where you exchange one fiat currency for another. Trade your preferred forex CFDs today with Bullquote.

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In online forex trading, traders trade currency pairs in the foreign exchange market. This is the largest and most liquid market in the financial world. A currency pair is the quotation of two different fiat currencies, such as the euro and the US dollar pair, EUR/USD, where the value of one currency is quoted against another. The first currency listed in the currency pair is known as the base currency. The second listed currency is referred to as the quote currency.

When trading a currency pair, the strength of the base currency is being compared to the value of the quote currency. The value or price expresses how many units of the quote currency you would need to purchase one unit of the base currency. Each currency is recognized by a three-letter alphabetic code known as an ISO currency code. For example, the U.S. dollar is cited as USD and the euro is cited as the EUR.