Bid and Ask for Currencies
For currencies, like for stocks, there is not just one price to worry about. A quote is given as a bid price and and ask price. So if we are using an online day trading platform, we might see the following for the EUR/USD currency pair:
EUR/USD Bid 1.2105 Ask 1.2107
This means that an institution (let's say a bank) is trying to buy (Bid) the euro versus the dollar at 1.2105 and another institution is offering to sell euros versus the dollar (Ask) at 1.2107. As currency day traders, we can buy from the bank that is selling at 1.2107 or sell to the bank that is buying at 1.2105.
The available currency spreads right now are tight enough to compete with the spreads in stocks. In fact, many times the spreads available for liquid currency pairs are much tighter than for the average stocks.
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This will be explained by a professional day trader during DTT's new online forex training sessions.
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