What's a cross rate, and why does it matter for beginners?

EUR/GBP is a cross: neither currency is the US dollar, yet most brokers price your account in dollars. That affects pip values, swap and the way you read the chart.

What's a cross rate, and why does it matter for beginners? — pip movement diagram
How a pip moves the exchange rate

For beginners, the practical questions are:

  • do you trade any crosses, and why?
  • how do you work out the pip value in dollars for a cross?
  • which crosses behave differently from what you expected?
What's a cross rate, and why does it matter for beginners? — risk-reward diagram
A risk-reward ratio of 1 to 2

The cross rates guide walks through the calculation with worked examples.

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