Understanding Currency Quotes

Understanding currency quotes is a big part of getting involved in the forex market. If you do not understand how currencies are quoted, you are not going to be able to place any trades or make a profit. Here are the basics of how to understand currency quotes.

Base and Quote Currencies

The main thing that you need to understand about currency quotes is that there are always two currencies. Anytime that you make a trade in the forex market, you are going to buy one currency and sell another simultaneously. Therefore, they have to list two currencies together at one time.

When you see a currency quote, the first currency is the base currency, and the second is the quote currency. For example, if you see GBP/USD = 1.3578, the base currency is the GBP, and the quote currency is the USD. 

Bid and Ask

You will also usually see two different prices when you are looking at a currency quote in the forex market. The first price is the bid price, and the second is the ask. The bid is what buyers are willing to pay, and the ask is what sellers are willing to sell at. The difference between the two is the spread.

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