#TradingPairs101 How Trading Pairs Work (Base Currency vs. Quote Currency)

Trading pairs are the essence of how financial markets operate, whether in Forex (traditional currencies) or in the world of cryptocurrencies. A trading pair always consists of two assets quoted against each other, establishing a value relationship between them. The way they are presented, for example, BTC/USD or EUR/USD, is not arbitrary and has a very specific meaning in executing your trades.

The first asset in the pair is known as the base currency, while the second is the quote currency (also called the quoted currency). The base currency is the asset you are buying or selling, and the quote currency is the asset you use to make that purchase or sale, or the value in which the price of the base currency is expressed. To put it simply, the price you see for the pair tells you how much of the quote currency you need to acquire one unit of the base currency.