Forex bid ask explained

The meaning of the quote is that one Ask is worth 1. No matter explained currency is the base currency bid whether USD, EUR ask any base currency -- the base currency always equals 1.

The quoted amount, 1. The forex convention is that when these two currencies are compared, EUR is always bid base. The meaning of this hypothetical quote is that 1 USD equals. If you divide 1 by. Here the bid is 1. If you spelled this out, it would explained like this:. Contrary to what you may think when you begin exploring the forex market, a bid price is not the price you'll bid when you want to buy a currency pair.

From the broker's perspective, when you're the potential buyer, the broker will ask for a little more than what he might be willing to bid if you were selling.

In the given example, since you're interested in buying EUR, the base currency, you'll pay the askthe broker's asking price, which is 3.

If you were selling, you'd accept the broker's bid, which is 3. If you find these terms forex confusing you'll forex be very accustomed to them forex helps to remember that bid terms bid ask ask are from the broker's perspective, not yours. When you're buying, bid pay what the broker's asking for the currency; when you're selling, you'll need to accept what the broker's bidding. The spread is simply the broker's commission on the trade.

A pip is the smallest unit of value in explained forex currency quote. So, in the example. Search the site GO. Forex Trading Basics Risk Management Getting Started Fundamental Analysis Technical Analysis Advanced Trading Forex FAQs. Updated August 16, If you explained this out, it would look like this: Ask Daily Money Tips to Your Inbox Email Address Forex Up.

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