Bid And Ask PriceFind out how to interpret the Bid and Ask price on

the Forex quote screen

What Spread is and why the price you canBuy and Sell at is so important...

Base Currency

The Base Currency is the 1st currency – It has an assigned

value of 1For every 1 of these

you can BUY X of theQuote currency

Currency Pair

All Forex trades are conducted in a

Currency pair which consists of a

Base currency and a Quote currency

Quote Currency

The Quote currencyis the 2nd currency

It will cost youX of these toBUY 1 of the

Base currency

Quote / Rate

Two prices are quoted The Bid

price andthe Ask price

Bid(SELL)Price

The Bid priceis the best price at which

you can SELL this Currency pair

It is, obviously, alwayslower than the best price

at which you canBuy it (the Ask price)

Ask(BUY)Price

The Ask priceis the best price at

which you can BUY this Currency pair

It is, obviously, always higher than the best

price at which you cansell it (the Bid price)

Spread

The difference between the

Bid (SELL) Price and the

Ask (BUY) Price

Bid And Ask Price

Produced by

The Spread is the reason that,as you soon as you place a trade,

your Profit & Loss is immediately negative

This is obvious really as the price at whichyou can BUY (the Ask price) is always higher than

the price at which you can SELL (the Bid price)and vice versa