Understanding Bid & Ask

A Bid is what someone is willing to pay for an asset. The Ask, or offer, is what someone is willing to accept to sell an asset. As a Forex trader, you can Buy at the Ask and Sell at the Bid.

Understanding the Forex exchange quote system is essential to Forex trading. You need to remember that the first currency listed in the symbol is the base currency, and the quote is the base currency in terms of the second currency in the symbol. Major currency pairs are EUR/USD, GBP/USD, USD/JPY, and USD/CHF.

For example:

1. A price quote of EURUSD at 1.3085 means that one Euro is equal to 1.3085 U.S. Dollars. When that number increases, it means the Euro is appreciating while the U.S. Dollar is depreciating and vice versa.
2. USDJPY is trading at 124.00. It means 1 U.S. Dollar is equal to 124 Japanese Yen. An increase in the number means that the U.S. Dollar is appreciating while the Japanese Yen is depreciating, and vice versa. Again, if a currency quote goes higher, that increases the value of the base currency. A lower quote means the base currency is weakening. Cross currency pairs are currency pairs that do not involve the U.S. dollar.
   For example:
   With EURJPY at a price of 126.34, it means that 1 Euro is equal to 126.34 Japanese
   Yen