Bid and Ask
Definition
Bid: sell price. Ask: buy price.
Bid and Ask are key terms in Forex trading, representing the sell and buy prices respectively. The bid is the highest price a buyer is willing to pay for a currency, while the ask is the lowest price a seller is willing to accept.
Understanding bid and ask prices is crucial for traders, as it helps determine the spread - the difference between the two, which is the broker's profit. For example, if the bid for EUR/USD is 1.12345 and the ask is 1.12350, the spread is 0.5 pips, which is the cost of trading that pair.