As already mentioned, the forex market deals with currency pairs and is defined as the process of buying and selling two currencies against each other.

Currency pairs are divided into four categories: majors, minors, crosses and exotics. The main ones are the 7 pairs created by the US dollar, which trades against the euro, British pound, Swiss franc, Japanese yen, Canadian dollar, Australian dollar and New Zealand dollar. Minors and crosses are exacerbated by one of the major currencies and currencies that are traded in smaller amounts.

Before you start trading in the Forex market, you need to learn how to read pairs. The first currency is the base currency and the second is the quote currency. For example, if you are trading EUR/USD, this means that you are buying euros and selling dollars.

If the euro strengthens against the dollar, you will be in profit, otherwise, if the dollar strengthens against the euro, you will not make a profit.

The exchange rate is displayed in the quote currency. If EUR/USD is trading at 1.1222, this means that to buy one euro, you need to pay 1.1222 US dollars.