A currency pair is a price for one currency expressed in another. In EURUSD, the euro is the base and the US dollar is the quote. If the pair is 1.0850, one euro costs 1.0850 dollars.
Majors pair the US dollar with the most liquid currencies: EUR, GBP, JPY, CHF, AUD, CAD, and NZD. They usually offer tighter spreads and deeper books than exotics, which is why most education starts here.
Pips and position size
A pip is the standard increment in the quote — typically the fourth decimal for most pairs, and the second decimal for JPY pairs. Position size decides how much each pip is worth to your account. Smaller size keeps a single move from dominating the day.
A simple reading habit
- Note the pair, the session, and whether liquidity is typical or thin.
- Mark nearby session highs and lows rather than chasing every tick.
- Ask whether the move is dollar-led or driven by the other currency.
That last question matters. EURUSD can fall because the euro is weak or because the dollar is strong. The chart looks the same; the context does not.
