The two halves of every pair
In any pair, the first currency is the base and the second is the quote (or counter) currency.
| Pair | Base | Quote | Meaning of the price |
|---|---|---|---|
| EUR/USD 1.0850 | EUR | USD | 1 EUR = 1.0850 USD |
| USD/JPY 150.00 | USD | JPY | 1 USD = 150 JPY |
| GBP/JPY 190.50 | GBP | JPY | 1 GBP = 190.50 JPY |
Three things the base and quote decide
1. What "buy" means. Buying always means buying the base currency and paying with the quote currency.
2. Your position size. Lot sizes are measured in the base currency. One standard lot of EUR/USD is €100,000; one standard lot of USD/JPY is $100,000.
3. The currency of your profit. Profit or loss is first calculated in the quote currency, then converted to your account currency.
Worked example
You have a US dollar account and buy 0.1 lots (10,000 units) of USD/JPY at 150.00. The price rises to 151.00.
- Price move: 1.00 yen per dollar.
- Profit in the quote currency: 10,000 × 1.00 = ¥10,000.
- Converted to dollars at the new rate: 10,000 ÷ 151.00 ≈ $66.23.