Forex Pairs: Beginners’ Guide

Understanding currency pairs: A beginner’s roadmap to Forex trading


Forex trading means buying and selling currencies. It is a big market where lots of money is traded every day. To do well in this market, you need to know about currency pairs. This article will help beginners learn about currency pairs and how they work in Forex trading.

Understanding Currency Pairs

When you trade Forex, you always trade two currencies together. This is called a currency pair. It has a base currency and a quote currency. The base currency is the first currency listed and the one you want to buy or sell. The quote currency is the second one and tells you the value of the base currency.

Major Currency Pairs

There are many currency pairs to trade, but some are more popular. We call these major currency pairs. Some examples are USD/JPY, EUR/USD, GBP/USD, and USD/CHF. These pairs are very common and are easy to trade.

Cross Currency Pairs

Apart from major currency pairs, there are also cross currency pairs. These pairs don’t include the US dollar. Examples are EUR/GBP, EUR/AUD, and GBP/JPY.

Understanding Currency Pair Pricing

Currency pair prices are shown as bid and ask prices. The bid price is the price the market wants to buy the base currency for, and the ask price is the price the market wants to sell the base currency for. The difference between these prices is called the spread. The spread is how brokers make money in Forex trading.

Factors Affecting Currency Pairs

Many things can make currency pairs move. Some important things to know are:

Economic Factors

Economic things like GDP, inflation rates, interest rates, and employment numbers can change currency pair values. Good economic news can make a currency worth more, while bad news can make it worth less.

Political Factors

Political events and problems can also change currency pair values. Elections, government decisions, and fights between countries can all cause changes.

Market Sentiment

Market sentiment means how traders feel about a currency. If lots of traders like a currency, its value can go up.

FAQs (Frequently Asked Questions)

Q: Can I trade Forex without understanding currency pairs?

A: No, it’s important to understand currency pairs to trade Forex well.

Q: Can I trade any currency pair at any time?

A: Yes, you can trade Forex 24 hours a day. But some currency pairs have more activity at certain times.

Q: Which currency pairs are best for beginners?

A: Beginners usually start with major currency pairs like EUR/USD, GBP/USD, and USD/JPY.

Q: How can I start Forex trading?

A: To start, find a good broker, open an account, put money in, and learn about trading platforms and strategies. It’s a good idea to practice with a demo account first.


1. Investopedia. “Currency Pairs Definition.” Retrieved from
2. DailyFX. “What Are the Most Commonly Traded Currency Pairs?” Retrieved from

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