Base Currency
The base currency is the first currency in a pair, the one you buy or sell, with the rate showing its price in the quote currency.
The base currency is the first in a pair, the one you buy or sell. In EUR/USD the rate shows how many dollars one euro costs.
The base currency is the first currency listed in a forex pair, and the one you are buying or selling. In EUR/USD, EUR is the base: the rate tells you how many US dollars one euro costs. Going long buys the base and sells the quote; going short sells the base and buys the quote. Getting base and quote the right way around is the first rule of reading any pair.
How It Works
- Base is first, quote is second in every pair
- Rate = units of quote currency per one base unit
- Long buys the base; short sells the base
Trading Tips
Always state direction by base: long EUR/USD = long euros
Pip values depend on the quote currency for pairs with USD second
Confusing base and quote is the most common beginner error
Related Terms
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