When an action happens on your website (e.g. buyer adds an item to their shopping cart), your Facebook pixel activates and records it as an "event". Events take place either as an outcome of Facebook ads (paid) or organic reach (unpaid). There are two categories of events: Standard & Custom.
Standard events are predefined actions that Facebook recognises and supports across ad products. When you attach them to your pixel code, you can log those standard events, optimise for conversions and create audiences.
Custom events are actions that fall outside those covered by Facebook's standard events, and you can grant them a unique name to represent the action taking place. You can use custom events to build Custom Audiences. You cannot use custom events for optimisation or attribution unless they're mapped to a custom conversion. You can then choose which standard event that you want the custom conversion optimised towards.
Here's what your website code will look like with standard or custom events installed:
Add events on the pages that focus on your business to follow your customer's journey. If you set up events along every step of their path (e.g. from product Pageviews all the way through to purchase) you can regulate and optimise your ads for the conversions that are important to your business.