- What are Forex quotes?
A forex quote is the price of one currency in terms of another currency. These quotes always involve currency/Commodities pairs because you are buying one currency/Commodities by selling another.
- Understanding Forex Quote Basics
Base currency and variable currency: Forex quotes show two currencies, the base currency, which appears first and the quote or variable currency, which appears last. The price of the first currency is always reflected in units of the second currency.
- Bid and ask price
When trading forex, a currency/Commodity pair will always quote two different prices
- The bid(SELL) price is the price that traders can sell currency at, and the ask(BUY) price is the price that traders can buy currency at. This may seem confusing as it is only natural to think of “bid” in terms of buying so just remember the bid/ask terminology is from the broker’s perspective. Traders will always be looking to buy Forex when the price is low and sell when the price rises; or sell forex in anticipation that the currency will depreciate and buy it back at a lower price in the future.
- The price to buy a currency will typically be more than the price to sell the currency. This difference is called the Spread and is where the broker earns money for executing the trade. Spreads tend to be tighter (less) for major currency pairs due to their high trading volume and liquidity.
The video below will help you to understand more of how to read a currency pairs