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Forex world can not be separated from Buy and Sell. Each trader has the freedom to do actions that he thinks right to obtain profit. Buy can also be compared with Long or Bid and Sell compared to Offer or Short. So if you read an article about forex and there are terms like Bid or Long, don’t be confused because both of them is synonymous with the Buy.
It is easy to read quotes. However, if not understand, it can lead to the confusion. Quotes on the forex transactions are written along with the usual pairs and always change according to the market from time to time (running / real time).
The way to read that is quite simple if we remember these two things:
1. The first currency is the base currency
2. Base currency value is always 1.
For example: USD / CHF 1.4623 means that 1
For each pairs usually have two prices: purchasing price (bid) and selling price (offer). Difference between them, are called the spread. So, if we use the example above, the USD / CHF 1.4623/28 means that the selling price is 1.4623 U.S. Dollar Swiss Franc and the purchasing price is 1.4628. Spread value here is 5 (.. 28 -.. 25 = 5).
Spread is determined by the broker and the value is different between one and another broker. It’s better for investors if the spread is smaller. Usually, spread in the range of 3-5 points for 5 types of major currencies. For the currency pair that’s rarely traded (minor currency), NZDJPY for example, the spread can be moved up to 8 points because of the transactions volume that are not too large.
Please note again that forex trading’s commodities are the currency itself. Well, if for example GBPUSD, then GBP is the commodity and USD is the benchmark currency that shows the price of commodity on the selling or buying price. So the currency written in front acts as the goods/commodity, and the currency lastly defined determines how much the value is.
