What Is The Difference Between Ask And Bid In Forex Trading Online?
Forex trading online in the foreign exchange market has become very popular. Many people are leaving stock markets and credit markets to invest in currencies in the foreign exchange market. Hence, there is an incline toward the foreign exchange market in the world.
The reason behind this incline is obvious. As compared to the stock market and credit market, the foreign exchange market has bigger returns. Even though the investments and risks in this market are also big, people tend to ignore those facts for the amount they get in return.
However, before beginning to trade in this market, it is very important to know certain basic terms of the market. These terms are a must if one wants to be a successful trader in the foreign exchange market.
How is an ask different than a bid?
An ask and a bid is two very important terms used in forex trading online. These two terms are used when a trader is trying to buy or sell different types of currencies in the foreign exchange market.
Even though these two terms used in forex trading online are the complete opposite of each other, people often get confused between the two. To avoid any kind of confusion in the meaning of the two terms, a proper understanding of the two terms is necessary.
The first term is asking. In simple words, an ask is the amount of money that a trader is willing to give for a certain type of currency. For example, if a trader wants to buy the US dollar in exchange for Indian rupees, they will put up an asking price of INR. Let’s say they are willing to give 50 INR for 1 US dollar. Then 50 INR becomes the asking price of the US dollar.
A bid is the opposite of an ask. A bid is the amount of money at which a trader wants to sell their currency. Usually, the price of buying a currency is always higher than the price at which a trader wants to sell it.