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Base Currency

The first currency stated in a currency pair

In the notation EUR/USD, EUR is the base currency. USD is the counter currency. This does NOT represent the number of euros for 1 US dollar like in a division. In fact it is the opposite and represents the number of US dollars to a euro.

When a trader longs, or buys the EUR/USD, he is buying the base currency (EUR) while selling the counter currency (USD). On the flip side, shorting or selling the EUR/USD would be selling the base currency (EUR) while buying the (USD).

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Information and opinions contained on this page are for educational purposes only and do not constitute trading recommendations.

Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any doubts.

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