Quotes, How to Read Forex Prices
Reading quotes is very easy. But if we don't understand it can be confusing too. Quotes on ordinary forex transactions are written in conjunction with the pairs and are always changing according to the market from time to time (running / real time).
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| pair forex market symbol |
The way to read it is quite simple if we remember these two things:
1. The first currency mentioned is the base currency
2. Base currency value is always 1.
For example: GBPUSD 1.5831 means 1 GBP value is 1.5831 dollars. If GBPUSD at the next time is 1.5841 it means GBP strengthens 10 points and the dollar weakens 10 points.
Every pair there are two prices displayed, namely the purchase price (bid) and the selling price (offer). The difference between the two is called a spread. So, if we use the example above, GBP / USD is at 1.5831 / 35 that means the GBP selling price is 1.5831 and the price is 1.5835 Spread here is 4 (..35 - .. 31 = 4).
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| pair forex market symbol |
Spreads are determined by brokers and their values vary between brokers and others. The smaller the spread, the better for investors. At GAIN Capital, spreads range from 2-5 points for 5 types of major currencies. For currency pairs that are rarely traded (minor currency) such as NZDJPY for example, spreads can move up to 8 points due to transaction volumes that are not too crowded.
In the picture above it is enough to describe how forex quotes look on a platform. Keep in mind that forex trading also has commodities that are traded, namely the currency itself. Well, if for example the appearance of GBPUSD then the item that becomes the item is GBP while the USD is the comparison currency that shows the price of the item at the selling price and purchases it. So the currency written in front acts as the item and the currency behind it determines the value.
If you are a new person in the world of exchanges, then you will encounter a variety of foreign terms that sound awkward in your ears. For that, we have prepared a simple dictionary about foreign terms in the world of forex that you can access through this website.
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