Buying and selling of forex in forex trading is done in pairs of currencies. One currency is called the base and the second constitutes the quote or counter currency.
For example, EUR/USD is one pair of currency. Under this pair, EURO is the base currency and USD or US dollar is the counter currency. Trading always takes place in combination of two currencies or currency pairs.
One buys Euro (long) in exchange for yen (short) or sell sterling pound (short) in exchange for Euro (long). The seven main currencies are USD, JPY, EUR, GBP, CAD, AUD, CHF (Swiss Franc). The most important currency pairs called the majors are EUR/USD, GBP/USD, USD/JPY, USD/CHF, USD/AUD and USD/CAD.
While undertaking Fx trading, one should also understand symbols and trading terminology. Other terminology terms are Euro, dollar yen, Swissy, dollar Canada, Aussie etc. Every position involves the selling of one currency and the buying of another, e.g. USD vs. Yen or USD vs. Swiss. Traditionally, the stronger currency is the base.
