Many of you might have heard about what is Forex bid-ask. But do you know what is bid in this case? Before getting deeper into the understanding of what is bid, you should know that the Forex market is one of the largest financial markets, and it deals with the trading of foreign currencies. It also includes the option of spot dealing or counter trading. The main objective of the Forex market is to facilitate the movement of currencies from country to country. The market is open for twenty-four hours and five days a week.
To understand what the forex bid is and ask price, it is better to look at the market’s working mechanism. When a person does wish to buy or sell a currency, the first step is to search the market and then place his order.
Bid Price
The forex’s bid price is defined as the price that a forex trader intends to sell a specific currency pair for.
Ask Price
Ask price is the price that a forex trader buys a specific currency pair at.
The difference between both is spread.
Spread
The spread in terms of forex is the difference between the ask and bid price. The bid price indicates the pricing on which you can sell a currency, and the asking price indicates the pricing on which you can purchase a currency pair.
What is a Long Position?
It is a trader’s lingo to buy an order. If you are purchasing a currency pair, then you’re opening a position that is “Long.”
What is a Short Position?
It is a trader’s lingo to sell orders. If you’re selling a currency pair, then you’re opening a position that is “Short.”