If you’re new to forex trading, the way prices are displayed can look a little intimidating at first. But once you understand the basics, reading a forex quote is actually pretty simple. Here’s a quick guide to help you make sense of what you’re looking at—without all the jargon.
What is a forex quote?
A forex quote shows the price of one currency compared to another. Since you always trade currency pairs in forex, you’re seeing how much of one currency you need to buy a unit of another.
Example:
EUR/USD = 1.1050
This means 1 euro = 1.1050 U.S. dollars.
Base currency vs. quote Currency
In every pair, the first currency is the base, and the second is the quote.
Using EUR/USD as an example:
- EUR (euro) is the base currency
- USD (U.S. dollar) is the quote currency
The quote tells you how much of the quote currency (USD) you need to get 1 unit of the base currency (EUR).
Bid and ask prices
Most forex quotes come with two prices: the bid and the ask.
Example:
EUR/USD = 1.1050 / 1.1053
- 1.1050 is the bid price (what the market is willing to pay if you’re selling)
- 1.1053 is the ask price (what you pay if you’re buying)
The difference between the two prices is called the spread, and it’s often how brokers make money.
Direct vs. indirect quotes
Depending on your home currency, you’ll either see:
- A direct quote (foreign currency in terms of your local currency)
- An indirect quote (your local currency in terms of the foreign currency)
For example, if you’re in the U.S., EUR/USD is a direct quote because it shows how many U.S. dollars you need for 1 euro.
Final thoughts
Reading a forex quote might seem confusing at first glance, but once you know how to spot the base, the quote, and the bid/ask prices, it becomes second nature. The key is to understand that you’re always looking at one currency’s value in relation to another. Keep practicing, and it’ll click in no time.
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