I refer to School of Pipsology; Preschool; How to make money trading forex. Under the introduction to Bid & Ask Price, It is stated that “This means the ask price is the best available price at which you will buy from the market.”
I seek to clarify the concept of Bid and Ask Price. Because to my understanding, people buy forex at low price to sell high. Using the attached image below as an example, the lower the price of EUR against USD means the Euro is stronger and hence it’s more attractive to investors to sell. However, the school teaching by Pipsology states instead that “it is the best price to buy from the market”. I seek to understand why is the school teaching as such. There might be some misunderstanding on my end and hence I hope to learn and clarify from your expertise and insights.
The graph was drawn by me to provide a visual aid to my question. Thank You!
I think you’re taking this too literally. Let’s go slowly -
First -
When we as private retail traders trade forex we are not buying or selling currency. In fact we are betting that the exchange rate between the EUR and the USD will either rise or fall.
The level at which we can place a bet that the exchange rate will rise is called the ask price: the level at which we can place our bet that the exchange rate will fall is called the bid price.
For forex market its simple.
In simple words, Bid price is that price which trader is willing to sell any currency pair.
Ask price is opposite to bid price means its a buyer price or price that buyer will pay to buy that currency pair.
