Understanding Forex Quotes - ForexTradingRoom tv

http://ForexTradingRoom.tv - The home to Free Live Trading Sessions http://ForexProAnalytics.com http://SmartForexTraders.com Understanding Forex Quotes - ForexTradingRoom.tv. Spread Bid and Ask Understanding Forex Quotes. The Foreign Exchange Market or Forex for short is the largest trading market in the world. Forex quotes are the most fundamental indicators in global exchange rates. Understanding forex quotes is essential to understanding the activity of the market. A Forex quote refers to the difference in exchange rate between two currencies. Every Forex transaction deals with two separate currencies - one is sold while the other is purchased. This happens simultaneously during any foreign exchange transaction. There is a base currency and a counter currency. These refer to the currencies being traded against each other. The value of the base currency is always one while the value of the other currency being traded is variable and fluctuates based on their exchange rate. The Forex quote refers to the value given by the counter currency. Let's use an example of the British pound sterling and the US dolla. The value of the GBP is one and the USD is 1.4628. This means that 1 dollar of the base currency is equal to 1.4628 of the counter currency. The Forex quoting this example is 1.4628. If the value goes up from 1.4628 to 1.4631 it means that the GBP has strengthened and the American dollar has weakened. A rising quote with a stronger value means that the GBP can now buy more US dollars. Forex curency quotes always consists of two prices- the bid price is the price at which you can sell the base currency and the ask is the price at which you can buy the base currency. To make things more streamlined you will always see the Bid on the left and Ask on the right. The difference between the Bid and Ask prices are called the Spread. In this example you can sell it at the bid price of 1.3726 and buy at the ask price of 1.3728. The spread represents the difference between the two prices. The digits used to measure the spread are referred to as pips. Spreads will vary based on the liquidity of the currency pair. A tight spread represents a more liquid currency pair and a wider spread represents less liquid currency pairing. Liquidity in currency pairs refers to the amount of those currencies being traded in real world markets at a given time. If the market is being flooded with GBP and USD transactions between the two countries doing business then the spread will be tight. If there is a modest amount of real world trade between the GBP and the USD then the spread will be wider to reflect this. Liquidity is a measurement of how quickly the product can be exchanged. In Forex scenarios it is represented by currency a tight spread is more beneficial since the difference in the buying and selling price of those pairs remains close together. To learn more about how the forex market operates visit the education section on our website forex trading room . TV the number one channel for forex market analysis. Understanding Forex quotes. https://youtu.be/FFEiFOygSr4 http://ForexTradingRoom.tv - The home to Free Live Trading Sessions http://ForexProAnalytics.com http://SmartForexTraders.com

Comments

1. My favorite pair in Forex is GBPUSD. It is also one of the most favorite pair in world of Forex trading. From many currencies all over the world few currencies are active in trade market. The most active currency in the world is US dollar. I am using GBP/USD which is mainly considered as bass currency in Forex market. My broker ECNCAPITAL all time ensure at any major currency pair including lowest trading spreads.
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