Base currency or quote currency

Trading Discussion Currencies
1

When I’m looking for pairs to trade does it matter which one is the base and which is the quote?

For example: should I trade eur/jpy or jpy/eur?
Does it matter? If so why?

2

EUR/JPY
It better to trade in EUR nowadays.

3

Only one of them can be the base currency, in your example its EUR/JPY.

4

but why would eur have to be base currency? why not JPY/EUR?

I’m just trying to make sense of it, I dont want to trade pairs that dont make sense.

5

This may answer your question: Indirect Quote

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6

Hi @MGHarris, It’s pretty much down to your broker and which orientation they offer their pairs in.

The majority of Brokers would offer only the EURJPY option, using EUR as the base.

The pairs are becoming more standardised across all brokerages as time goes by.

I have noticed that TradeView Web Scanning software app offers multiple orientations on most (midrange crosses) of the currency pairs…so… they are out there.

I started with IG markets and they used to (2016) offer EURJPY and JPYEUR… (Edit) so I’d place a buy on both or a sell on both and the one that appeared to trend the strongest I’d continue and the other I’d close… with obviously mixed results…

Hope this offers some insight

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7

This is interesting @Trendswithbenefits - when you did this back in the day, wouldn’t it mean both would have been trending identically anyway?

Why would you place a buy or sell on both?

8

Yea, maybe a typo.

EURJPY is the reciprocal of JPYEUR - so 100% inversely correlated.

A 5% move in one would equal the same -5% move in the other, at the exact same time (i’d imagine, unless i’ve lost the plot here too)

Remember this from back at school?

The reciprocal function: y = 1/x

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