Forex describes the exchange of one currency for another. To understand a forex quote, identify the currency pair, the price used for buying or selling, the size of the position and its costs. A leveraged forex product can create losses much larger than a small change in the quoted exchange rate might suggest.
In EUR/USD, the euro is the base currency and the US dollar is the quote currency. A hypothetical price of 1.1000 means one euro is valued at USD 1.10. If EUR/USD rises, the euro has strengthened relative to the dollar. The CME explanation of currency quotations provides background on this convention; check the convention for your specific instrument.
Changing money for travel is different from entering a leveraged currency derivative. With a forex CFD, the account reflects gains or losses on the contract rather than a delivery of holiday cash. Read the product description before treating a familiar currency symbol as a complete explanation of what you are buying.
For many pairs quoted to four decimal places, a pip is 0.0001. A move from 1.1000 to 1.1010 is therefore 10 pips. Conventions differ across instruments, and a platform may show smaller fractional movements. Always check the tick size, contract size and account currency before calculating a cash result.
A quote normally shows a bid and an ask. The ask is the price for buying and the bid is the price for selling. Their difference is the spread, which is a cost to consider when opening and closing a position. A narrow spread at one moment is not a promise that the same spread will apply during a volatile release.
Assume a hypothetical EUR/USD contract represents 10,000 euros of exposure. The executable quote is 1.1000 bid and 1.1002 ask. A buy at 1.1002 followed immediately by a sale at the unchanged bid of 1.1000 would produce a USD 2 price loss. That is the 0.0002 difference multiplied by 10,000.
Hypothetical closing bid | Price result for the long position |
1.1052 | USD 50 gain before other charges |
1.0952 | USD 50 loss before other charges |
These results use the actual entry ask and assumed exit bid, so the quoted spread is already reflected in the price difference. Commission, overnight financing and any currency-conversion cost remain separate. If the account currency is not USD, the final account result also depends on the applicable conversion.
Margin is collateral for a leveraged position; it is not its full market exposure and should not be mistaken for a maximum loss. The required margin, account equity and available funds can change as prices move. Check the provider’s margin-closeout rules and how it communicates insufficient funds.
Before placing an order, estimate what several adverse price moves would mean in money. Include other open positions rather than evaluating each one in isolation. A demo environment can help you learn the controls, but it does not reproduce every live execution condition or the experience of losing real money.
The AT Securities global-markets page explains its ATFX relationship. Review the named entity in your agreement and the applicable ATFX risk disclosure before considering an account. The ATGO information page describes account-related features; confirm the tools and product access available to your particular account.
No. The pair measures their relative value. A rising quote means the euro buys more dollars, without telling you how either currency moved against every other currency.
No. Compare the spread alongside commission, financing, conversion and any other applicable charges. The cost of holding a position can differ from the cost of opening it.
Depending on the contract and protections, losses can exceed initial margin. Read the actual terms; do not assume another country’s client protections apply to your account.
Explore AT Securities and ATFX global-market information and request the contract specification, current costs and relevant account documents. Use those details to decide whether you understand the product and its risks.
Risk note: Leveraged forex products are high risk and may be unsuitable for you. All prices here are fictional. This material is educational, not a trading signal or personal investment advice.
