The Forex Trading Bid & Ask Prices and Spread

This page covers everything you need to know about the bid and ask prices in the online Forex trading market, From the definition of Forex bid & ask prices, to the use of the bid & ask spread.
A Forex Trading Bid price is the price at which the market is prepared to buy a specific currency pair in the Forex trading market. This is the price that the trader of Forex buys his base currency in. In the quote, the Forex bid price appears to the left of the currency quote. For example, If the EUR/USD pair is 1.2342/47, then the bid price is 1.2342. Meaning you can sell the EUR for 1.2342 USD.
A Forex asking price is the price at which the market is ready to sell a certain Forex Trading currency pair in the online Forex market. This is the price that the trader buys in. It appears to the right of the Forex quote. For example, in the same EUR/USD pair of 1.2342/47, the ask price us 1.2347. This means you can buy one EUR for 1.2347 USD.

Stop orders

A stop order is placed to accumulate profits or to prevent losses. To place a stop order, simply specify the price where you'd like to place the stop on. Stop orders are sometimes names stop loss orders, and can occur for both bid and ask transactions.
A stop loss order is a type of Forex Trading limit order that serves as a protection against a large drop in currency price. If the currency price falls beneath the price you set, it is automatically sold, thus ensuring you do not lose too much money.

Limit orders

Forex Trading Limit entry orders are executed only if the currency price touches but not breaks the price you set. Limit orders are done when traders want to set the limit price. These orders are executed only if the currency reaches the limit price you set. Limit orders are used when you want to buy and sell a currency only if it reaches a certain price or better. Let's say the currency pair EUR/USD is worth 1.245, and you buy a limit order of 1.249. This means that the transaction will be executed only if the currency price rises to 1.249.

"If Done" Orders

This Forex trading order is executed only when the previous order is also executed. This way you can work on other currency orders and not have to worry about executing of a specific order. An "if done" order can be illustrated with the following example. Let's say you want to buy a certain currency, but also want to place a stop to make sure you do not lose much money on the trade. You then place two Forex trading orders- one for the first buying of the currency, and the other for the stop. The second order for the stop will be placed as an "if done" order, in order to make sure that the stop will be placed only when the first order is filled.

Market Orders

Market orders are the most basic Forex trading orders that are bought and sold for the current market price. With market orders, the transaction is done regardless of the price. The Forex trading software gives you real time prices, so you can decide exactly when to execute a market order with ease. Market orders are perfect for situations where you follow a certain currency up close. The minute you want to enter a position you can buy and sell the currency at a click of a button using Forex trading market order.
The main thing to remember about market orders is that they are executed for the current market price, and that this is beneficial if you want to instantly enter a position.
The process of placing Forex trading orders is like so:
1. First you specify the currency pair and the size of the deal. Let's say the EUR/USD pair quoted 1.2603/06, for 2 lots of $100 each.
2. Next you choose to either sell each EUR for 1.2603 USD (bid price), or choose to buy each EUR for 1.2607 USD (ask price).
3. Finally, the transaction is confirmed by your dealer. This only takes a few seconds for Forex trading orders.

How to Place Different Types of Forex Trading Orders

In this page we explain about the different forex order types available for online Forex trading. The most important things to remember about placing a Forex trading order is this: Always understand the orders you place. Never place an order which you are not entirely knowledgeable about. You'll be able to see the orders available for you after you open your trading account, so soon after check and learn about the different ones you can make.
There are various Forex trading order types to choose from, and each order has its advantages and disadvantages, which will described in later pages.

Forex account activation and confirmation

Because we are dealing with real money accounts, you are required to verify your details and your email, through various needed steps. Before you sign the terms and conditions of the Forex trading account, make sure you understand what the site is offering. You should make sure you understand about the various conditions that include:
- The Forex site's hours of operation and the availability of live support.
- The bid/ask spread that the site offers for major currencies, in relation to what other sites offer.
- Make sure that proper leverage is available through the margin per trade.
- Find out about The minimum account size and lot size.
- Check that there are no small print or hidden commissions that the site's operators prefer you don’t know about.
- If you can, try out the Forex trading platform, as well as the charting and technical analysis options beforehand.
- Check the general contract and make sure you save it along with the requoting policy on your computer.