03. What is a Bid and Ask Price?

 

BID PRICE is the price of forex trader willing to SELL a currency pair for. 

ASK PRICE is the price of trader will BUY a currency pair at. 

Both of these prices are given in real time and constantly updating. Let me explain in more detail. For this example we will use GBPUSD. The British Pound against the U.S Dollar has a Bid Price of 1.20720. That's the price the trader wants to sell the Pound U.S Dollar.

 For Example: a seller who thinks a currency will decline might sell it at the Bid Price to take advantage of the fall. 

If the British Pound against the U.S Dollar (GBPUSD) has an Ask Price of 1.20740, that's the price the trader wants to pay in order to buy the currency pair. 

The difference between Ask and the Bid Price is the Spread. 

What's the Spread? good question, then see you in the next blog.