Forex Education Center/ Part 26 / FOREX FOR BEGINNERS COURSE / Lesson 7. How to interpret Prices of Currency Pairs

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Welcome to the Forex for Beginners course.
As a reminder the course is aimed for complete beginners.
I tried to keep the lessons short and to the point giving out clear examples and videos where required.

Lesson 7. How to interpret Prices of Currency Pairs:
How can you read and interpret the price quotes shown by brokers? Lets see how…

Currency are always quoted as follows:

EUR/USD = 1.2845

EUR in this case is called the Base Currency

USD is called the Counter Currency

So,

EUR/USD = 1.2845 means 1Euro(€) is equivalent to 1.2845 US Dollars ($)

Similarly,

USD/CHF = 1.1054 means 1 US Dollar($) is equivalent to 1.1054 to Swiss Franks

USD/JPY = 108.34 means 1 US Dollar($) is equivalent to 108.34 Yen(¥)

Notice that I am quoting the prices with 4 decimal places.

There are many brokers that quote their price in 5 digits format – and this really confuse me.

I always ignore the last decimal point. 5 Decimal point price shows up like this:

EUR/USD = 1.28452

Notice also that the Yen is quoted with 2 or 3 decimal places like 86.36 for USD/JPY pair.

It is the only currency with 2 or 3 points.

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Below you can find the list with all the posts of Forex Education Center:

 

Part 01 / Live Vs. Demo Trading Accounts

Part 02 / Slippage

Part 03 / ECN Market

Part 04 / What Makes a Successful Price ActionTrader 

Part 05 / The Manual of the Forex Art of War

Part 06 / The Don’ts when you Compare Forex Brokers

Part 07 / What is behind Currency Pair Trading

Part 08 / Banks: Beacons of Fraud

Part 09 / Win With CFD’s

Part 10 / Fight and Win the Bulls and Bears

Part 11 / How to Spot a Forex Trading Fraud

Part 12 /  Become a Master with News Trading

Part 13 / The Forex Risk Management State of Mind

Part 14 / Top 10 Forex Trading Tips for Beginners – The Road to Success

Part 15 / Trader’s Strategy Checklist

Part 16 / E Currency Trading

Part 17 / E CURRENCY TRADING MAP

Part 18 / FOREX TRADING TUTORIALS

Part 19 / FOREX TRADING COURSES

Part 20 / FOREX FOR BEGINNERS COURSE / Lesson 1. Trading Currency Pairs

Part 21 / FOREX FOR BEGINNERS COURSE / Lesson 2. What is scalping

Part 22 / FOREX FOR BEGINNERS COURSE / Lesson 3. Intra Day Trading

Part 23 / FOREX FOR BEGINNERS COURSE / Lesson 4. End of Day Trading

Part 24 / FOREX FOR BEGINNERS COURSE / Lesson 5. Traders Psychology

Part 25 / FOREX FOR BEGINNERS COURSE / Lesson 6. Best Trading Hours