CURRENCY TRADING BASICS
Although stocks and shares are traded singularly, all currency trading must be done in pairs. When forex trading, you simultaneously buy one currency and sell another. For example, the GBP/USD currency pair is sterling vs the dollar. The first currency in the pair (in this case GBP) is known as the base. This is the currency you think will go up or down in value against the second currency (in this case USD), which is known as the quote.
Currencies are often priced to the fifth decimal point. The smallest increment of any trade is known as a ‘pip’, which stands for percentage in point.