How to trade EUR/USD: pips, lot size, sessions and what moves it

1. What the quote means

The first currency, the euro, is priced in the second, the US dollar. A quote of 1.1000 would mean one euro costs 1.10 dollars. That number is an example, not a price. When the quote rises the euro gains against the dollar, and when it falls the dollar gains. Our EUR/USD numbers page shows how far the pair usually moves.

2. Pips and lots

A pip is normally 0.0001, the fourth decimal place, and many brokers add a fifth digit for a fraction of a pip. A standard lot is one hundred thousand euros, so one pip on one lot is worth about ten US dollars. Mini and micro lots are smaller, and the exact sizes are in your broker's contract specification. The arithmetic is the same as for gold, set out in how to calculate lot size and pip value.

3. When it is busiest

The pair trades around the clock on weekdays and closes for the weekend. It is busiest when London and New York are both open, in the afternoon in European time, and it moves fast around scheduled news. Late evening and the Asian hours are often quieter, and the spread can widen. Read best time to trade gold for how to check the busiest hours of any market.

4. What moves it

• Central banks: the European Central Bank and the US Federal Reserve. Read gold and interest rates for how rate news is read.
• Inflation and jobs data on both sides. See the US jobs report and inflation.
• The mood about growth, which moves the dollar and the euro in different ways on different days.

The dollar index is partly the euro, so the two often move against each other. Keep an economic calendar open.

5. Size from the stop

Decide where the idea is proven wrong, then work the lot size back from the amount you accept to lose. A tight spread helps, but a swap can apply to positions held overnight, and leverage can make a size error expensive. See how much to risk per trade and how to set a stop. They are written for gold and the method is the same.

6. What we have not tested

We have not tested any EUR/USD rule, and no BaroqTech strategy has passed our judge yet, so this page explains the pair and promises nothing. If you want a rule, write it down and backtest it with costs first, and practise on a demo account.

The Monthly Pass and the Lifetime Pass are software licences for your own MetaTrader account. They score every robot and strategy you run the same way, with costs inside every number. See the plans.

FAQ

An educational tool. It is not investment advice. Trading leveraged products such as gold CFDs carries a high risk of losing money, and you can lose all of it.

BaroqTech makes software. It is not investment advice and it does not manage money. Trading leveraged products such as currency CFDs carries a high risk of losing money, and you can lose all of it. Results from a test or from a demo account do not predict results on a real account.