When you think of a pair, it usually consists of two things: a pair of shoes or a pair of tickets...two shoes or two tickets. With a currency pair, there are two currencies.
In the Forex market, a currency pair consists of a "base" currency (the first currency in the pair) and a "cross" currency (the second currency in the pair) and is displayed as a symbol. For example, the symbol EUR/USD is for the Euro/US dollar. In this example, the Euro is the "base" currency and the US dollar is the "cross" currency.
In the Forex, there are six major currency pairs. They are:
EUR/USD - Euro/US Dollar
GBP/USD - Great British Pound/US Dollar
USD/CHF - US Dollar/Swiss Franc
USD/JPY - US Dollar/Japanese Yen
AUD/USD - Australian Dollar/US Dollar
USD/CAD - US Dollar/Canadian Dollar
The Forex revolves around the exchange rates between the two currencies in the pair. These exchange rates change from day to day, minute to minute, even second to second and these price fluctuations create a market.
Currency traders buy a currency if they think the price will go up and they sell a currency if they think the price will go down. Without a software program or extensive training in the Forex market, most people are basically guessing which way the price will move. Some people have more sophisticated methods of guessing, but it is still guessing.
Learn the risk of investing in the Forex market before you open a live account and fund it with your money.
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