How to read Forex offers or quotes
How to Read Forex Offerings or Quote when first getting to know the forex market (FX Market) we will certainly be confused with the quote currency that is delivered, for example EUR / USD, which has two positions at once, namely sell and buy positions.
In the forex market all traded currencies are offered in pairs so that it is possible for traders to have many choices. For example, when we are able to predict that the US Dollar currency will strengthen (bullish) and therefore we install the Open Buy position. In the forex market, it allows us to buy dollars (USD) with other currencies, for example, EUR, JPY, or other.
In the EUR / USD quote , it can be said that the first written currency, EUR, is called the base currency, while the second currency, USD, is called the counter currency . So if the EUR / USD currency pair is trading at 1.0456, the quote shows that how many counter currencies are needed to buy a base currency unit. So it takes $ 1,0456 USD to buy one Euro.
So you have to remember when you will open an order against a currency pair whether you will buy (Open Buy) base currency or sell (Open Sell) base currency and it is easy to remember that we are doing the opposite thing on the counter currency . For example, when we buy base currency EUR, we are also selling counter currency USD.
The easy thing we can do in the forex market is to buy if you predict that the rate will go up and sell if the rate will go down and you will benefit when doing both predictions.
All quotes on the forex market will be submitted always in pairs followed by the purchase price (bid / buy) and selling price (offer / sell). The purchase price is the price rate that you can buy on a currency pair and the selling price is the price rate you can sell. The difference between the buying rate and the selling rate is called the spread.
The EUR / USD currency pair spreads by 15.2 Pips (1.0931 – 1.0918) which is the difference between the selling price and the purchase price. This means that when you open an Open Buy position you need to increase prices by the spread value to break even. So this spread is a broker’s advantage when providing currency buying and selling transactions.