Module 1: Forex Fundamentals
Currency Pairs
5 min read
Currencies are always quoted in pairs, because you are buying one and selling the other at the same time.
Why pairs?
A currency only has a price relative to another currency. EUR/USD shows how many US dollars one euro costs. Buying EUR/USD means buying euros and selling dollars; selling it means the opposite.
Currency codes
Currencies use three-letter ISO codes: USD (US dollar), EUR (euro), GBP (British pound), JPY (Japanese yen), CHF (Swiss franc), CAD (Canadian dollar), AUD (Australian dollar) and NZD (New Zealand dollar).
Example: Going long and short
If you expect the pound to strengthen against the dollar, you might buy GBP/USD. If you expect it to weaken, you might sell GBP/USD.
Key takeaways
- Every trade buys one currency and sells another.
- Buy a pair if you expect the first currency to strengthen.
- Learn the main three-letter currency codes.
Educational content only, not financial advice. Trading forex and CFDs involves significant risk of loss.