7. Quotes, How To Read Forex

7. Quotes, How To Read Forex

Reading quotes is easy. But if we do not understand can be confusing as well. Quotes on forex transactions is usually written in conjunction with his pairs and always changing with the market from time to time (running / real time).

I read quite simple if we remember two things:

1. The first currency mentioned is the currency of his base (base currency)

2. Base currency value is always 1.

For example: GBPUSD 1.5831 means that 1 GBP 1.5831 dollar value is. If GBPUSD at 1.5841 is the next time it means that the GBP gained 10 points and the dollar weakened 10 points.

Every two pairs displayed price is the purchase price (bid) and selling price (offer). The difference between the two is called the spread. So, if we use the example above, GBP / USD is at 1.5831 / 35 it means the selling price is GBP 1.5831 and 1.5835 purchasing Sharga Spread here the value 4 (..35 - .. 31 = 4).

Spread is determined by the broker and its value varies from one broker to another. The smaller the spread the better for investors. At GAIN Capital, a spread ranging between 2-5 points on 5 major currencies. For currency pairs that are rarely traded (minor currency) as NZDJPY for example, the spread can move up 8 points due to the volume of transactions that are not too crowded.

Quote_Metatrader

 

In the above image it feels quite describe how your forex quotes on a platform. Please note again that forex trading is also a commodity being traded is currency itself. Well, if for example the GBPUSD see the finished goods was GBP while the USD is the quote currency which shows the price of the item at the sale price and the purchase. So currencies are written in front acting as the goods and currency are behind as determining what rate.

If you are a novice in the world of exchange, then you will encounter many unfamiliar terms that sound strange ears. To that end, Belajarforex has prepared a simple dictionary of the foreign terms in the forex world that you can access through this website.

Well, now you can read forex quotes. See you in the next lesson.