When trading different currency pairs you will notice that they are made up of abbreviations. The abbreviations used for currencies are made by the International Organization for Standardization (ISO).
The Base currency is the first currency in the quote, also called Transaction currency.
The second currency is called the Counter currency, also called Quote currency.
EUR / USD
Base currency / Counter currency
Trading different Forex currency pairs involves the simultaneous purchase of one currency and sale of another, however the currency pair itself can be thought of as a single unit, a financial instrument that is bought or sold. When you open a buy order for a currency pair, you buy the base currency and sell the quote currency. Likewise, when you sell the currency pair, you sell the base currency and receive the quote currency.
Example: Let's say the price of EUR/USD is 1.10340. In order to Buy one (1) Euro you would have to Sell 1.10340 worth of USD. To Sell one (1) Euro you would have to Buy 1.10340 worth of USD.
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