How to read a currency quote for a certain currency pair
A currency quote for a currency pair like the Euro against
the US Dollar is written as EUR/USD
In that case, the Euro is called the base currency because
it comes first while the US Dollar is called the quote currency.
How are quotes used in the forex charts
Let’s assume that the US Dollar and the Euro have equal
values and equal supply and demand.
In that case, EUR/USD or simply the Euro divided by the US
Dollar, would be equal to 1.
But we all know that that is not the case. At the time of
making this post, one Euro had more value than one US Dollar.
This means that during that time, EUR/USD was greater than
1, let’s say 1.12345
What does the quote price(number) mean
If the value of the Euro continued to rise that quote price
number would continue to increase but if the opposite happened the number would
reduce.
You can also translate that quote to mean that 1 Euro is
worth 1.12345 US Dollars.
Note that the increase and decrease normally, is not very
big and almost all the time, it involves only the numbers in the decimal
places.
Representation of the increase and decrease in the relative
price of currencies in the Forex Charts
The increase and decrease in price is represented in Forex
Charts by Candlesticks.
Each candlestick represents a specific period of time like
one hour or one day, which you can customize in the Trading Platform.
