🧩 Currency Pairs & How They Work

In forex trading, currencies are always traded in pairs — you’re buying one and selling another at the same time.

💼 Major, Minor & Exotic Pairs

1. 🌟 Major Pairs
   These involve the USD and other major currencies. They are the most liquid and widely traded.
   Examples:

   • EUR/USD 🇪🇺🇺🇸

   • GBP/USD 🇬🇧🇺🇸

   • USD/JPY 🇺🇸🇯🇵

2. 🌐 Minor Pairs
   These don’t include the USD but still involve major global currencies.
   Examples:

   • EUR/GBP 🇪🇺🇬🇧

   • AUD/JPY 🇦🇺🇯🇵

   • EUR/CHF 🇪🇺🇨🇭

3. 🧨 Exotic Pairs
   These include one major currency and one from a developing or smaller economy. Less liquid, higher spread.
   Examples:

   • USD/TRY 🇺🇸🇹🇷

   • EUR/ZAR 🇪🇺🇿🇦

   • USD/THB 🇺🇸🇹🇭

💱 Base & Quote Currency

Every pair is written like this:
BASE/QUOTE

Example: EUR/USD = 1.1000

• Base Currency (EUR 🇪🇺): This is the currency you’re buying.

• Quote Currency (USD 🇺🇸): This is the currency you’re selling (or paying).

➡️ So, 1 EUR = 1.10 USD

📏 Pip, Spread & Lot Size

📌 Pip (Percentage in Point)

The smallest movement in price — usually the 4th decimal.
Example: EUR/USD goes from 1.1000 → 1.1001, that’s 1 pip.

Exception: For JPY pairs, pip is the 2nd decimal (e.g., 110.10 → 110.11 = 1 pip)

📉 Spread

The difference between the buy (ask) and sell (bid) price.
Example:
EUR/USD

• Buy: 1.1002

• Sell: 1.1000
  ➡️ Spread = 2 pips

👉 This is often how brokers make money.

📦 Lot Size

Defines how much of a currency you’re trading.

✅ Example Trade

You buy 1 mini lot (0.1) of EUR/USD at 1.1000, and it goes up to 1.1020.

• That’s 20 pips profit

• 0.1 lot = $1 per pip

• 20 pips × $1 = $20 profit