How to Read Currency Pairs Currency Quote - How to Trade Currency Pairs Currency Quotes
To read a currency pairs currency quote you'll 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 currency market.
How to Read Currency Pairs Currency Quote in MT4
Explanation of currency exchange rates on MT4 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 shown below:
First two letters - identify name of country
Last letter - identify the currency
Example:
USD= USA Dollar
This name is also commonly known as a currency symbol, therefore for USA Dollar, the currency name/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 forex trader wants to buy the first currency using the second currency which's 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's 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.
Explanation 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:
EUR USD
- 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 EUR USD currency exchange rate quote = 1.2000
It means the ratio of 1 EUR : USD = 1 : 1.2000
Hence it means 1 Euro = 1.2000 US dollars
EURUSD
In this case The EUR is the base currency & USD is the quote currency.
| Base Currency | Quote Currency |
| EUR | USD |
| 1 | 1.20000 |
The base is always 1 unit, and the exchange rate quote is expressed 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 as a trader can buy 1.2 dollars.
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