Base currency
The first currency in a currency pair. The quote tells you how much of the second (quote) currency one unit of the base currency costs.
Every forex quote involves two currencies. The one written first is the base currency, and it is always worth exactly one unit in the quote. The second is the quote currency.
Worked example
If EUR/USD is quoted at 1.0850, the euro is the base currency and one euro costs 1.0850 US dollars. If USD/JPY is 150.20, the US dollar is the base and one dollar costs 150.20 yen.
When you buy a pair, you buy the base currency and sell the quote currency. When you sell, you do the opposite. So buying EUR/USD is a view that the euro will strengthen against the dollar; selling USD/JPY is a view that the dollar will weaken against the yen.
Why it matters for trade size
Lot sizes are measured in the base currency. One standard lot of EUR/USD is 100,000 euros; one standard lot of USD/JPY is 100,000 dollars. Profit and loss, on the other hand, is first calculated in the quote currency and then converted into your account currency.
Not the same as account base currency
Brokers also use "base currency" to mean the currency your trading account is held in (for example EUR, USD or GBP). That is a different thing. Your account currency affects conversion fees and how your results are reported, as explained in currency conversion and account base currency.
The ordering of pairs follows market convention (EUR before GBP before AUD before USD, for example), not alphabetical order. Our guide to currency pairs explains the conventions.
Not investment advice. This is general information and education, written without knowledge of your circumstances. It is not a recommendation to buy or sell any instrument. Past performance is not a reliable indicator of future results. Trading leveraged products carries a high risk of losing money. Risk warning