Forex is traded in pairs and mimics the underlying
Forex is always traded in pairs – for example, the euro and the US dollar (EUR/USD). You’re always buying one currency and selling the other in the pair, based on which currency you think is going to appreciate in value against the other. The currency being bought is known as the base currency (appears on the left), while the other is called the quote currency (appears on the right).
The price of the pair shows how many of the quote currency it’ll cost to buy one of the base. So, if EUR/USD is trading at 1.35000, it means it costs $1.35 to buy €1. Note that CFD forex trading is designed to mimic trading the underlying market relatively closely. Our forex CFD prices are only driven by the movements of the underlying market (with the exception of our weekend FX prices, when most markets are closed, so prices driven by upcoming market events and client sentiment).
Lastly, currencies are traded in lots – batches of currency used to standardise forex trades. These lots tend to be large, to account for the fact that forex price movements are usually small. For example, a standard lot is 100,000 units of the base currency while a micro lot is 1,000 units.
