FOREX Bid Ask

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FOREX Bid Ask

When you go to a foreign exchange counter to get some Euros before traveling to Europe, you buy them at a certain price, which is called bid price. When you return back home to the US, and want to exchange the leftover euros, you sell them at a different price which is always worse than the price you buy them at. This price is called ask price. And the difference between the bid and the ask prices is called spread.

FOREX bid ask prices represent the same thing as buy and sell prices in this foreign exchange counter I mentioned above with only one difference. In FOREX the spread will be much lower than in a foreign exchange counter because you operate larger amounts of cash.

On FOREX live charts you usually see bid price only. To determine ask price, you need to add spread to whatever you see on your charts. If spread is variable, and depends on market activity, FOREX bid ask prices will always be different, and you will have to watch FOREX bid ask prices carefully in your terminal before placing your orders to avoid big losses when the spread is at maximum.

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