Forex Terminology

When you are new to Forex you are likely to be confronted with a lot of new bewildering Forex terminology.Some you may be familiar with if you have traded other forms of investments such as Stocks or options. Other terms are unique to the Forex currency market.
So in order for you to be able to ‘converse’ with your Broker, we have provided detailed explanations of some of the key Forex terms below. Take time to understand these terms and how they are used in relation to your brokerage account (especially Leverage!).

Bid Price

The Bid Price is the price that the market is prepared to buy a specific currency pair for on the Forex markets. For the Forex trader this is the ‘sell’ price of the base currency.
Example: In the quote EUR/USD 1.4510/13 the bid price is 1.4510. This means you can sell one Euro for 1.4510 dollars.

Ask Price

The Ask Price is the price that the market is currently prepared to sell a currency pair for in the Forex market. For the Forex trader this is the ‘buy’ price of the base currency.
Example: In the quote EUR/USD 1.4615/18 the ask price is 1.4618. This means you can buy one Euro for 1.4618 dollars.