In forex, currencies are always traded in pairs. The first currency is called the base currency and the second currency is called the quote currency. For example, EURUSD, means that the base currency is the Euro and the quote currency is the US Dollar. The quote currency is also referred to as the counter currency.
The ideal way to comprehend base and quote currencies is in terms of exchange rates. An exchange rate of 1.12160, for example, would mean that 1 unit of base currency would cost 1.12160 units of quote currency. So in this case, to own 1 EUR the equivalent of 1.12160 USD is needed, meaning the first currency in a pair is quoted against the second currency.
More on Beginner's Education
What Is Margin Call?
Margin Call is a notification which alerts you that you need to deposit more money in your trading account, or close losing positions, to free up margin. Margin Call is denoted as a fixed percentage, determined by the broker. You can find the Margin Call percentage in...
What Is Stop Out?
Since we have already covered Free Margin and Margin Call, it is now time to look at Stop Out. In forex trading, Stop Out is the level at which the broker starts closing automatically (“liquidating”) all of his least-profitable open positions in the foreign exchange...
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.
