Published November 1, 2026 · Beginner education
THE IDEA, IN PLAIN LANGUAGE
A forex price compares two currencies. The pair identifies which currencies are being exchanged and in what order. Major pairs typically include the US dollar; availability and trading costs vary by broker.
KEY VOCABULARY
- Pair
- Two currencies quoted together.
A PRACTICAL EXAMPLE
EUR/USD compares euros with US dollars. A rise in EUR/USD means the euro buys more dollars, all else equal.
A COMMON MISTAKE
Reading a rising pair as meaning both currencies are strengthening.
WHAT TO REMEMBER
A currency price is relative to the other currency in the pair.
SOURCE REFERENCES
Use these external resources to study further. Explanations here are our own; external resources may change.
- BabyPips: related source lesson ↗
- BabyPips: School of Pipsology — beginner forex curriculum ↗
- CFTC: understand forex risks ↗
RELATED VIDEOS
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