small decor objects - **Currency pairs** are the heart of forex trading. Currencies are always traded in pairs, like EUR/USD (Euro/US Dollar) or GBP/JPY (British Pound/Japanese Yen). The first currency in the pair is called the base currency, and the second is the quote currency. When you trade, you're essentially speculating on the value of the base currency relative to the quote currency. The price displayed represents how much of the quote currency you need to buy one unit of the base currency. For instance, if EUR/USD is trading at 1.10, it means it costs $1.10 to buy 1 euro. You profit by buying a currency pair at a lower price and selling it at a higher price (going long), or by selling a currency pair at a higher price and buying it back at a lower price (going short). The difference between the buying and selling price is called the spread, which is a key cost in forex trading. Understanding the relationship between these currencies and the factors that influence their values is critical. Currency pairs are categorized based on their popularity and trading volume, with major pairs (like EUR/USD, GBP/USD, USD/JPY) being the most liquid and widely traded.
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