Bid and Ask (Spread)

Spread via MT4

All Forex quotes are quoted via two prices: the Bid and Ask. For the most part, the Bid is lower than the Ask price.

The Bid is the price at which your broker is willing to buy the base currency in exchange for the quote currency. This means the Bid is the best available price at which you (the Trader) will sell to the market.

The Ask is the price at which your broker will sell the best currency in exchange for the quote currency. This means the Ask price is the best available price at which you, will buy from the market.

The difference between the Bid and the Ask price is popularly known as the Spread.

On the EURUSD quote above, the Bid price is 1.37320 and the Ask is 1.37333.

If you want to sell EUR, you click “Sell by Market” and you will sell Euro at 1.37320, if you want to buy EUR, you click “Buy by Market” and you will buy Euro at 1.37333.

This also means that the Spread is 1.37333 - 1.37320 = 1.3 pip This kind of tight spread can make your trading life much easier.

The definition of Spread is: The difference between Bid and the Ask price. Essentially, it’s the difference in how much profit or loss you will incur. The better the price you get in & out of the trade, the better the profits. So, the above tight spread example (exclusively True STP low Spreads through ForexScream) also means that if you just so happen to be wrong for a few of your trades, it won’t matter to your Account’s profitability.