Trading knowledge libraryBase and Quote Currency ExplainedMarket Basics
Market Basics
Base and Quote Currency Explained
Every currency pair has a base, the thing being priced, and a quote, the money it is priced in. This paper shows you the two names on a real price, why the profit on one real trade arrived in dollars, what a pip is worth on two pairs whose quote is not the dollar, how to read a pair the other way round, and where the platform names the two sides.
Every currency pair has two sides, and each has a name. The base currency is the one on the left: the thing being priced, and the price is always for exactly one unit of it. The quote currency is the one on the right: the money the price is written in. EUR/USD at 1.15872 reads as one euro — the base — costs 1.15872 dollars — the quote. The order never changes: the base is priced, the quote does the pricing.
Which currency the profit is in
Here is the consequence of the names, on the real trade. One lot of EUR/USD is 100,000 euros — 100,000 units of the base. Bought at the open of 3 September 2026 at 1.15872 and sold at the close at 1.16259, the price rose by 0.00387 dollars per euro; a pip is the fourth decimal place, so 38.7 pips. Multiply by 100,000 euros and the result is 387 dollars, not euros. The profit arrives in the quote currency, because the price is written in it. That is why a pip on this pair is worth ten dollars per lot.
On a pair whose quote is not the dollar, the pip arrives in that other currency and the platform converts it. On USD/JPY the quote is the yen, so a pip on one lot is 1,000 yen; on a dollar account that is 1,000 divided by the rate of the moment, 157.421, which is $6.35. On EUR/GBP the quote is the pound, so a pip is ten pounds, which at 1.35376 is $13.54. The amount in the quote currency is fixed; its value in your own account's currency moves with the rate between the two.
