Trading glossary
Counter currency
Trading involves risk. You could lose more than your deposit.
The counter currency is the second currency written in a pair, the one the rate counts out, and the currency any result on that pair arrives in before conversion.
The currency written second in a currency pair, also called the quote currency or the terms currency. It is what gets counted: the rate states how many units of it one unit of the base currency costs. The three names are interchangeable, and a glossary listing all of them is naming one field three times rather than describing three things.
Its importance is arithmetic. Because the rate counts units of the counter currency, both the value of a pip and the result on a position are denominated in it. When the account is held in some other currency, that result is converted at the prevailing rate at the time it is realised, which introduces a second exchange rate into the outcome that was never part of the position being traded.
The trip is confusing three currencies that can all be different: the base, which is the unit being priced, the counter, which does the pricing, and the account currency, which the balance is kept in. Only when the counter currency and the account currency happen to be the same does a result arrive without a conversion.
How it is calculated
The value of one pip equals the size of one pip in decimal terms multiplied by the contract size, and the result is expressed in the counter currency.
Where the result lands on one standard lot
- Pair
- Base first, counter second
- Contract size
- 100,000 units of the base
- One pip
- 0.0001
- Value of one pip
- 100,000 × 0.0001 = 10.00, in the counter currency
- Where an account in another currency sees it
- 10.00 converted at the prevailing rate when realised
Illustrative arithmetic on a pair quoted to four decimal places. Pairs quoted to two decimal places use a different pip, and no rate here is a quote.
Get started
Open your account in four steps.
A clear path from sign-up to your first trade, in four steps.
No depositNo documents
01/ 04step 1 of 4
Register
A few details to get started.
No deposit to open
02/ 04step 2 of 4
Verify
Confirm your identity, securely.
ID and proof of address
03/ 04step 3 of 4
Fund
Add money by bank transfer or card.
From $0
04/ 04step 4 of 4
Trade
Go live on the platform you already know.
MetaTrader 5
