Lesson 2 – Forex Quotes

AdminBy AdminNov 10, 20170

Quotes in the Forex or the prices of currency pairs are the basis of all transactions, studies, strategies and analisys we can carry on this field. In this market, when it comes to a currency quote it means the price of one currency against another. When talking about EUR / USD for example, you can very well in a relationship against each other, or euro against the dollar.

These quotes are expressed as two numbers, one higher and one lower.

The lowest number is also called “money” or “bid” and represents the price at which the broker (market makers)) is placed at a given time to buy the currency in the numerator.

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The highest number instead is called “letter” or “ask” and represents the price at which the broker (market maker) is willing to sell the currency at a given time in the numerator.

The difference between bid and ask (and thus between bid and ask) is called the spread. This difference is the gain of the broker on the transaction, which is the only transaction cost in the online Forex.

So, if for example we have 100 000 EUR / USD (ie 100,000 euro against the dollar) we have a listing of BID type at 1.3500 and a listing of ASK type 1.3502 where the difference of 0.0002 represents the spread. The broker will buy and sell at 1.3500 to 1.3502.

In this case, if for example we want to invest on the euro, we will buy the EUR / USD that is going “long” (long) and the euro will gain if the price will rise.

On the contrary, by opening a short position (short) that is selling, we will focus on the fall and then we will gain if the euro price will fall.

Gains and losses are always expressed in dollars, USD, and in general in the currency denominator.

Base Currency And  Listed Currencies

Base Currency And  Listed Currencies

There we will turn around for a while ‘, but it is better to take stock of the situation and settle in head certain concepts and make them just as much as possible. The terms “base currency” and “quote currency” or “counter.” are widely used in the field, especially the “base currency” or “base currency”. If we take the example of the currency pair EUR / USD, the base currency is EUR. In general, the base currency is placed in the numerator, that is the first one you read in the currency pair.

The BID is the purchase price of the base currency account the quote currency

The ASK is the selling price of the base currency against the quote currency.

Here, therefore, remember to give a definition is always used as a reference the base currency.

Using the platform forex trading to a broker (subject we shall return in more classes and passionately), you can find a purchase price (bid) and selling price (ask) for each currency pair. The prices will be different, and the difference (spread) between them represent the broker gain on the transaction.

On each trading platform you can view the real-time graph of the base currency (bid) but it is said that you can even find that listed, particularly in any case is not important, because even if you decide to “sell” you can reference the same the bid graph, obviously in the hope that prices fall.

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