Forex or FX market quotes are said to be currency quotes found in a specific currency pair. These forex market quotes are known as secondary currencies which are quoted in a FX market currency pair. When seen in a direct quote, they are known as the foreign currency but in an indirect quote, they are seen as a domestic currency.
TYPES OF FOREX MARKET QUOTES
DIRECT FX MARKET QUOTES
A direct forex market quote can be defined as a foreign exchange rate which is quoted in terms of a domestic currency per unit of the foreign currency. A direct FX market quote comprises of a quote in their fixed units of foreign currency in contrary to variable quantities of the domestic currency. For example, a direct market quote of the United States Dollar compared to a Canadian dollar in the U.S would be denoted as 0.7658 U.S dollar equals 1 Canadianwhile in the country Canada, a direct market quote would be 1.3456 Canadian dollar equals 1 United States dollar.
INDIRECT FOREX MARKET QUOTE
An indirect FX market quote can be defined as a currency quotation in the forex market that denotes the quantity of foreign currency necessary to buy or sell one unit of a domestic currency. An indirect forex market quote which can also be called a quantity quotation because it have the ability to express the quantity of foreign currency essential for the buy and sell units of a domestic currency. This only means that in the indirect quote, the domestic currency is seen as the base currency while the foreign currency is known to be the counter currency.
An indirect FX market quote is viewed as the reverse of a direct quote and this is because the direct quote which can also be called the price quotation denotes the price of one unit of a foreign currency in a domestic currency.
INDICATIVE FOREX MARKET QUOTE
In the forex market, an indicative FX market quote can be defined as a currency quote which is given out to a forex trading party by a market maker. This shows that when an indicative FX market quote is generated by a market maker for a forex trader, the market maker will not be forced to trade the specific currency pair at the exact price and amount specified in the quote. Here, the market maker automatically agrees on a particular bid and ask price with the FX trader which states a maximum quality outlined in the quote.
In conclusion, the comprehension of forex market quotes and pricing structure is very important in the lives of forex traders who have intensions of trading successfully in the forex market.
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