The object of forex trading is the exchange of one currency with another currency. The exchange rate is only the ratio of one currency valued from the other currency. For example, the USD / CHF exchange rate shows how many US dollars can buy a Swiss franc, or how many Swiss francs do you need to buy one US dollar.
How to Read Forex Quote
Currencies are always quoted in pairs, such as GBP / USD or USD / JPY. The reason they are quoted in this pair is because in every foreign exchange transaction, you are simultaneously buying one currency and selling the other. Here is an example of foreign exchange rates for the British pound against the US dollar: The first listed currency to the left of the slash ("/") is known as the base currency (in this example, the British pound), while the second on the right is called the eye money counter or offer (in this example, US dollars). When buying, the exchange rate tells you how much you have to pay in quote currency units to buy one unit of the base currency. In the example above, you have to pay 1.51258 US dollars to buy 1 British pound.
When selling, the exchange rate tells you how many units of the quote currency you can sell for one unit of the base currency. In the example above, you will receive 1.51258 US dollars when you sell 1 British pound. The base currency is the "base" to buy or sell. If you buy EUR / USD this means that you are buying a base currency and simultaneously selling quote currency. In the cave man talk, "buy EUR, sell USD." You will buy a partner if you believe that the base currency will go up compared to the quote currency. You will sell the currency pair if you think the base currency will depreciate (loss of value) relative to the quote currency.