Forex and currency mechanics
Understand the units behind every forex order.
Forex trading uses currency pairs, so every price, quantity, profit and cost depends on which currency is bought, which is sold and which currency the account uses. This hub brings those units together with worked conversions, quote conventions and calculators that expose their assumptions.
What this topic covers
Use these resources to check terminology and arithmetic before configuring a copied forex order. They explain market conventions and educational calculations; they do not establish that a particular broker, symbol or account route is supported.
Every resource identifies its sources, assumptions and correction route. Read the editorial standards for the review method.
Questions answered here
- How do base, quote and account currencies affect a trade?
- What is the difference between lots, units, pips and points?
- How are margin, position size and settlement-currency values calculated?
- Which inputs must be confirmed with the broker or platform?
Complete topic index
12 reviewed resources
Guides (1)
- Forex vs Stocks: Compare the Instrument, Exposure and Workflow
Compare forex and stocks by ownership, quote units, exposure, costs and execution. Learn why the account and instrument matter more than the market label.
References (8)
- Base and Quote Currency: Read an FX Price with Units
Read FX pairs as quote units per base unit, calculate notional and pip changes, and distinguish pair direction from account and settlement currencies.
- Cross-Currency Rates: Calculate with Units and Quote Sides
Derive cross rates through a common currency using original examples, including bid-ask treatment, synchronized quotes and account-currency applications.
- Direct and Indirect FX Quotes: Perspective and Reciprocals
Understand domestic-currency quote perspective, invert two-sided FX prices correctly and avoid equal-percentage assumptions when reversing a pair.
- FX Forward Points: Convert a Quoted Adjustment Into an Outright Rate
Convert positive and negative forward points into an outright FX rate, check quotation direction, and distinguish carry pricing from an exchange-rate forecast.
- Lots, Units and Contract Size: Translate Quantity Into Exposure
Convert lots to units with a checked example, distinguish futures multipliers from FX lot sizes, and audit quantity translation between instruments.
- Pips, Points and Ticks: Convert Price Distances Without a Factor-of-Ten Error
Convert one price movement into pips, platform points and futures ticks, then keep price units separate from position-dependent money values.
- Settlement Currency Conversion: Reconcile Trading P&L
Trace profit and loss from an instrument’s settlement currency into account currency with explicit rate direction, timestamps, fees and original examples.
- Spot and Forward FX: Compare Dates, Carry and Quote Direction
Understand why spot and forward currency prices differ, with a simplified interest-parity example and clear limits for futures and broker rolling products.
Calculators and tools (3)
- Forex Market Hours Converter (DST-Aware)
Convert Sydney, Tokyo, London and New York Forex reference sessions into your time zone with date-specific DST adjustments while explaining broker-hour limitations.
- Forex Profit Calculator by Units or Lots
Estimate long or short Forex price-move P&L by units or lots, convert it into an account currency, and show user-entered costs and assumptions.
- Pip Value Calculator: Units and Account Currency
Calculate one pip in quote and account currency from base units, pip size and a conversion rate you supply. Includes a worked FX example and unit checks.
Product context
Connect the education to a verified workflow
A correct formula or market definition does not prove that every broker, platform pair, account mode or order action is supported. Check the current product information for the exact setup.
Check the Forex and Futures copying workflowReview current platform and connection information before applying an educational calculation to a live account.
