In currency trading, the spot price of a pair is influenced by numerous factors—economic conditions, geopolitical events, and market-moving news releases, all of which can be interpreted positively or negatively by traders.

Contracts for Difference (CFDs) allow traders to buy (go long) or sell (go short) and potentially profit or lose from price fluctuations without having to physically purchase or exchange the underlying currencies.

FX prices are quoted in pairs, with each pair representing two global currencies or economies. The first currency is known as the base currency (the amount you intend to trade), while the second is the term or quote currency (indicating the current exchange rate).

For example, the EUR/USD price shows how many US dollars are needed to exchange for €1.

EUR/USD = 1.11361

This means that at present, €1 is equivalent to $1.11361.

Prices continually shift based on overall market conditions.

In simple terms, traders enter a long position when they expect the base currency to strengthen against the quote currency, aiming to benefit from rising prices. Conversely, if they anticipate the base currency will weaken, they may open a sell position in hopes of profiting from a price decline. If the market moves opposite their prediction, losses may occur.

FX currency movements are usually measured in pips, and depending on your trade size, each pip corresponds to a specific monetary value of the quote currency. Pip value determines your profit or loss based on the number of pips gained or lost in a trade and is also used to calculate the spread (the gap between the bid and ask price).

At FxPro, all FX pairs are quoted with an extra decimal place beyond the pip, meaning the final digit represents a Point (10% of a pip).

Fractional pricing in FX trading helps provide tighter spreads and more precise pricing.

If you’re new to online forex trading, we recommend exploring our educational resources to learn more about the market and how CFD trading functions. We also offer instructional videos and downloadable PDF guides to support your learning.