Currencies are traded in dollar amounts called *lots* — One lot is equal to $1,000, which controls $100,000 in currency. You can control $100,000 worth of currency for only 1,000 dollars.
Currencies are always traded in pairs. The most popular currencies and their symbols are:
USD - The US Dollar
EUR - The currency of the European Union "EURO"
GBP - The British Pound
JPN - The Japanese Yen
CHF - The Swiss Franc
AUD - The Australian Dollar
CAD - The Canadian Dollar
A currency can’t be traded by itself, so you can't trade a EUR by itself. You always need to compare one currency with another currency to make a trade possible.
The most commonly traded currency pairs are:
EUR/USD Euro / US Dollar
"Euro"
USD/JPY US Dollar / Japanese Yen
"Dollar Yen"
GBP/USD British Pound / US Dollar
"Cable"
USD/CAD US Dollar / Canadian Dollar
"Dollar Canada"
AUD/USD Australian Dollar/US Dollar
"Aussie Dollar"
USD/CHF US Dollar / Swiss Franc
"Swissy"
EUR/JPY Euro / Japanese Yen
"Euro Yen"
The currency on the left is called the base currency. The currency on the right is the counter currency. For example, when you place an order to buy EUR/USD pair, you are actually buying the EUR and you are selling the USD. When you place an order to sell EUR/USD you are selling the EUR and you are buying the USD. Buying or selling a currency PAIR means buying or selling the base currency, and doing the opposite with the counter currency.
It means when you place trades you simply sell or buy the pair. The base/counter concept is only important for fundamental analysis.
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