Forex trading quotes are charts that display the actual price of a security at different points in time. Forex trading quotes actually let a trader to use short term and long term technical analysis on thousands of forex currency pairs. These quotes on a security shows the bid price, the ask price, the pips and spread of currency pairs.
DEFINITION OF TERMS USED IN FOREX TRADING QUOTES
Column 1 NAMES
Column 2 BID
Column 3 ASK
Column 4 CHANGE
Column 5 %CHANGE
Column 6 HIGH
Column 7 LOW
Column 8 TIME
COLUMN 1 (CURRENCY PAIRS)
A currency pair (e.g. USD/CAD) is a quotation and primary structure of currencies which are traded in the foreign exchange market. A currency pair has two abbreviations in which the first outlined currency of the currency pair is called the base while the second currency of the currency pair is called the quote currency.
COLUMNS 2 AND 3 (BID AND ASK PRICE)
These are said to be a two directional price quotation that denotes the best price at which a security can either be bought or sold at a given point in time. The bid price is the maximum price at which a forex buyer will have to pay for a given security while the ask price is the minimum price at which a seller will receive for the security.A spread is the difference between the bid and the asked price of a forex market currency quotes where the ask price is a buy order and the sell order being the bid price.
COLUMN 4 (CHANGE)
This is said to be the currency (e.g. dollar) value change in the currency price from the closing currency price of the previous day. The word “currency being up for the day” means that they were a positive net change.
Column 5 (%CHANGE)
The percentage change is said to be the percentage return on the invested currency. It’s seen as the profit gained from the trading in percentage.
Columns 6 and 7 (high and low price)
The terms high price and low price indicates the price range at which the currency pairs have traded throughout the trading period. They indicate the maximum and minimum prices that other traders have paid for the currency pair.
COLUMN 8 (TIME)
This indicates the best period of time to trade.
HOW TO READ A FOREX TRADING QUOTE
In order to effectively read a forex currency quote a trader must be careful not to make mistakes. A currency is quoted in relation to another currency. This means that the value of one currency is reflected to another currency. For example, given the USD/CAD; when one is trying to determine the exchange rate between these two currencies, it might look like this: USD/CAD=118.50. This quote means that 1 USD=118.50 CAD.
Also, care should be taken when reading the bid price which is the price at which the traders will buy the base currency, the ask price which is the price at which the trader will sell the base currency, the pip which is the smallest movement made by a price and the spread which is the difference between the bid and ask price. All these are being contained in a forex trading quote.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.