#TradingPairs101 Trading Pairs: The Basics

Imagine a trading pair as a way to show the exchange rate between two different financial elements. It is more common in the Forex market (where currencies are exchanged), but you will also see it with things like cryptocurrencies.

The way a pair is quoted tells you how much of the second element (the quote asset) you need to buy one unit of the first element (the base asset).

For example, with EUR/USD:

* EUR (Euro) is the base, or what you are buying.

* USD (United States Dollar) is the quote, or what you are using to buy it.

So, if EUR/USD is trading at 1.0800, it means you need 1.08 US dollars to buy 1 euro. It’s like saying: "This is what X costs in terms of Y".

Does it make more sense this way? Let me know if you have any other questions!