Forex Quotes Understanding Bid and Ask Prices

forex-bid-ask.jpgThis is part of technical terms associated with foreign exchange trading. Price terms are very important to forex trading and the information is also crucial for every trader. Those important terms are “quote” and “spread”. Forex quotes come with two kinds of prices, Bid and Ask.

 

The word “quote” is used in almost all kinds of businesses and stands for an approximate market price. Most foreign currency forex quotes are given in pairs.

 

Forex trading works only with currency pairs like the USD/GBP.

Now the USD is the base currency while the GBP (Poundsterling) is the quote currency. The world’s financial wholesale markets quote a currency using 5 different yet important numbers. The last number is known as the pip.

 

For easy example you can check your Metatrader Chart. At the default MT4 setting will shown the Bid price, you can show the Ask price by right click on MT4 chart, go to properties and check the “Show Ask Line” the gap between Bid and Ask price are the “Spread”. Hopefully those can describe about it for you.

 

 

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