Understanding Spread, ASK and Bid Price in Forex Trading

Understanding Spread, ASK and Bid Price in Forex TradingEach forex trading platform has their own display option for pricing. But, commonly, it has display with asking price, biding price, and average price.

Your pricing display based on your needed.And you can chose which chart that meet your need.

1. Asking Price
It is a price of currency pair you can buy from broker
Example: EUR/USD pair is 1.2000/45 the ask price is 1.2022. It means you can buy 1 EUR with price 1.2022 USD

2. Bid price
It is the price at which the market is prepared to buy specific currency pairs in the forex trading market.
Example: EUR/ USD pair is 1.2000/45 the bid price is 1.20000, it means you can sell 1 EUR for 1.2000 USD.

3. Average Price
Average price is the between the bid and ask price. It just display for balanced view of the price action. The point is you can see the price movement here. You can not trade for this price.

4. The Spread

Spread is difference price between bid and ask price. From this spread, broker make their money .The seller pay their asking price and the bidder pay their bid price, and the broker keeps in the middle. But spread just move at current price.

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