How to Read Currency Pairs Currency Quote - How to Trade Currency Pairs Currency Quotes

To read a currency pairs currency quote you will need to first learn the currency naming formats used in the forex market we shall first look at how currencies are named & then look at how forex pairs are named and then explain how to trade forex currencies currency quotes. Understanding these currency naming formats is one the basics as forex currency pairs are the main instruments being traded in the forex market.

How to Read Currency Pairs Currency Quote on MetaTrader 4

Example of currency exchange rates on MetaTrader 4 Platform Software

Reading a Currency Quote - What is Forex Base Currency and Quote Currency?

Currencies Naming Format

The naming format has three letters, explanation of each letter is illustrated below:

First two letters - identify name of country

Last letter - identify the currency

Example:

USD= USA Dollar

This name is also commonly referred to as a currency symbol, therefore for US Dollar, the currency name or currency symbol is USD.

Examples of Other Currency Symbols

Currency Naming Format and Currency Symbols

Forex Currency Quotes

In a Currency Quote - The first currency in a forex pair is referred to as the base currency. The base currency in a forex quote is the currency against which exchange rate is quoted when a trader wants to buy this first currency using the second currency which is referred to as the quote currency.

For Example EURUSD - EURO is the base currency and US Dollar is the quote Currency

Base Currency: What is Base currency? This is the first currency in a pair (EUR). The Base is equivalent to 1 unit of the first currency.

Quote Currency: What is Quote currency? This is the second currency in a pair (USD). The Quote shows the value of the base currency in relation to the second currency.

Example of EURUSD Currency Quote - What is a Forex Currency Quote?

EURUSD is one of the major forex pair in Forex, therefore we shall use this EURUSD currency pair for our example:

EURUSD

• Base Currency - EUR

This is the first currency in a pair (EUR). The Base is equal to 1 unit of the first currency.

• Quote Currency - USD

This is the second currency in a pair (USD). The Quote shows the value of the base currency in relation to the second currency.

If EURUSD currency exchange rate quote = 1.2000

It means the ratio of EUR : USD = 1 : 1.2000

Therefore it means 1 Euro = 1.2000 US dollars

EURUSD

In this case The EUR is the base currency & USD is the quote currency.

The base is always 1 unit, and the exchange rate quote is in terms of the quote currency.

Therefore, if exchange rate of EURUSD = 1.20000, it means 1 Euro = 1.2 US dollars. So for each 1 Euro you have, you can buy 1.2 dollars.