Reading Forex Quote
Reading forex quote is basic to forex trading
Currency prices is always quoted in respect to another currency. Example, if you go to a money changer, and wanted to change some Singapore currency (SGD) to US currency (USD), you will be looking for USDSGD rate. Exchange rate at point of writing is 1.38.
In the forex quote, there is always a left side and right side. The left side (base currency) is always equal to 1, while the right size (second currency) is always equal to exchange rate.
In this case, 1.38 means USDSGD = 1.38. Every USD$1 requires SGD$1.38.
READ FOREX QUOTE IN DETAIL
- The currency on the left is the base currency. That is always 1. On the right will be the second currency. This will be the exchange rate
- For example, if EURUSD quotes 1.1236, it means that every 1 dollar of EUR is worth 1.1236 USD
- In a price quote, there will always be the BID and ASK price
- If you like to sell or short EURUSD, your transaction will be done at the Bid price
- If you like to buy or long EURUSD, your transaction will be done at the Ask price
TIP: as trader, we are always worse off. So we always buy at higher price and sell at lower price
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