How currency pairs are written

A pair such as EUR/USD compares the euro with the US dollar. The first currency is the base currency and the second is the quote currency. If EUR/USD rises, the euro is strengthening against the dollar.

What a pip shows

A pip is a small unit of price movement. Traders use pips to describe how far price moved and where a stop loss or target sits. Pip value changes with the pair, lot size, and account currency.

Why lot size matters

Lot size controls trade exposure. A setup may look small on the chart, but a large lot size can make the loss too heavy. Beginners should practice calculating potential loss before thinking about possible gain.

Key takeaways

  • Read the pair before reading the chart.
  • Calculate pip value before entering a trade.
  • Small lot sizes help beginners survive mistakes.