How Do Currency Pairings Work?
Education
Before you can trade the forex market effectively, you need to understand how currency pairs are structured and what you're actually buying and selling when you place a trade. It's simpler than it looks.
How to Read a Currency Pair Quote
Every forex pair has two components: the base currency and the quote currency.
The base currency is the currency you are measuring. If you are trading the Euro against the US Dollar, the Euro is your base currency.
The quote currency is what the base is being measured against. In EUR/USD, the US Dollar is the quote currency.
When you see EUR/USD trading at 1.10000, it means one Euro buys 1.10 US Dollars. When you buy the pair, you are buying Euros and selling Dollars. When you sell the pair, you are selling Euros and buying Dollars. That's the entire mechanic.
What about CAD/USD? Popularly traded pairs come in a conventional order, but you don't need a separate CAD/USD pair to buy Canadian Dollars against the US Dollar. You simply take a short position on USD/CAD — selling USD against CAD is functionally identical to buying CAD against USD.
Major Pairs
Major pairs are the most heavily traded instruments in the forex market. They all include the US Dollar as either the base or quote currency and offer the tightest spreads, deepest liquidity, and cleanest price action of any pairs available.
If you are new to forex, start here. At PTM we primarily trade EUR/USD, GBP/USD, and AUD/USD — they offer the best combination of volume, spread, and consistency, and they are the pairs our team covers most closely.
Currency Pair · Base Currency · Quote Currency · Nickname
EUR/USD · Euro (€) · US Dollar ($) · Euro Dollar / EU
USD/JPY · US Dollar ($) · Japanese Yen (¥) · Dollar Yen / UJ
GBP/USD · Pound Sterling (£) · US Dollar ($) · Pound Dollar / GU
AUD/USD · Australian Dollar ($) · US Dollar ($) · Aussie Dollar / AU
USD/CAD · US Dollar ($) · Canadian Dollar ($) · Dollar CAD
USD/CHF · US Dollar ($) · Swiss Franc (CHF) · Dollar Swiss
NZD/USD · New Zealand Dollar ($) · US Dollar ($) · Kiwi / NU
Minor Pairs
Minor pairs are made up of major world currencies paired against each other — without the US Dollar. They have decent volume and can offer clean price action, particularly in the Asia session where yen and Aussie pairs tend to move well.
The trade-off is slightly higher spreads compared to the majors, and in some cases more susceptibility to manipulation. That said, plenty of traders in the PTM community trade minor pairs exclusively and get excellent results from them.
Currency Pair · Base Currency · Quote Currency · Nickname
EUR/CHF · Euro (€) · Swiss Franc (CHF) · Euro Swiss
EUR/JPY · Euro (€) · Japanese Yen (¥) · Euro Yen / EJ
EUR/CAD · Euro (€) · Canadian Dollar ($) · Euro CAD
EUR/AUD · Euro (€) · Australian Dollar ($) · Euro Aussie / EA
EUR/NZD · Euro (€) · New Zealand Dollar ($) · Euro NZD
EUR/GBP · Euro (€) · Pound Sterling (£) · Euro Pound / EG
GBP/JPY · Pound Sterling (£) · Japanese Yen (¥) · Pound Yen / GJ
GBP/AUD · Pound Sterling (£) · Australian Dollar ($) · Pound Aussie / GA
GBP/CAD · Pound Sterling (£) · Canadian Dollar ($) · Pound CAD
GBP/CHF · Pound Sterling (£) · Swiss Franc (CHF) · Pound Swiss
CAD/JPY · Canadian Dollar ($) · Japanese Yen (¥) · CAD Yen / CJ
AUD/JPY · Australian Dollar ($) · Japanese Yen (¥) · Aussie Yen / AJ
NZD/JPY · New Zealand Dollar ($) · Japanese Yen (¥) · NZD Yen / NJ
CHF/JPY · Swiss Franc (CHF) · Japanese Yen (¥) · Swiss Yen
Exotic Pairs
Exotic pairs combine a major currency with one from an emerging or smaller economy. We would not recommend starting with exotic pairs — spreads are significantly higher, liquidity is lower, and price action can be erratic and difficult to read. If you are already familiar with a specific exotic pair and trade it actively, that is a different story. But for anyone building their foundation, the majors and minors are a better use of your time and capital.
Precious Metals and Commodity Markets
Precious metals — primarily spot gold (XAUUSD) and spot silver (XAGUSD) — are available through most FX brokers and are widely traded within the PTM community. Gold in particular is a favourite given its high volatility and relatively low commissions.
That volatility is worth noting, though. Gold moves fast, and on active sessions like New York you can experience slippage even on days without high-impact news. If you are new to gold, spend time in simulation before going live — understand how it moves and how much it can cover in a single session before risking real capital on it.
On the commodities side, energy products like crude oil and natural gas are available at most brokers, as are food commodities like wheat, corn, and coffee. These are traded far less frequently within our community and we won't cover them in depth here — they deserve their own article.
Indices, Stocks, ETFs, and Futures
Indices are among our favourite instruments to day trade alongside currencies. The S&P 500 (US500), Dow Jones (US30), Nasdaq 100 (US100), FTSE, DAX, and Nikkei are all accessible as CFDs through most major FX brokers via MT4, MT5, or cTrader. High liquidity and consistent intraday volatility make them excellent instruments for both day trading and swing trading.
Stocks and equities are now available as CFDs at most major FX brokers — most blue-chip US stocks are accessible through your existing FX account. At PTM our primary focus remains currencies, gold, and indices, but the methodology applies equally well to stocks.
Futures allow investors and institutions to agree on a price today for delivery of an asset at a future date. They are exchange-traded derivatives and are used extensively for hedging as well as speculation.
ETFs (Exchange Traded Funds) function similarly to mutual funds — they track a basket of assets such as a major index, a commodity, or an industry sector — but trade freely on exchanges like individual stocks. The most common ETFs track the major indices and commodities like oil and natural gas.
Cryptocurrencies
Cryptocurrency is one of the most talked-about and least understood markets of the past two decades. While most of the PTM team does not actively trade crypto, some use it as a speculative long-term position, and a handful of community members do take intraday positions on major cryptocurrencies — including on funded and live accounts.
The risks are real. Crypto markets combine the volatility of forex with far lower liquidity and significantly more manipulation. That does not mean there is no opportunity — clearly there is, otherwise the market would not exist — but it does mean the margin for error is smaller.
The majors — Bitcoin, Ethereum, and Litecoin — are the most widely supported across FX brokers and prop firms, given they carry the largest market capitalisations. Tether, BNB, and ADA are notable runners-up available at select brokers.
Alt-coins and tokens are any cryptocurrency other than Bitcoin. These range from legitimate mid-cap projects to outright pump-and-dump schemes with no real utility. Most are only accessible through decentralised exchanges (DEXs) and are not offered by mainstream FX brokers. Approach with caution.
The bottom line: if you are new to trading, crypto is not where you build your foundation. Start with the major currency pairs, understand structure and risk management, and let other markets come later once you have a genuine edge established.