Forex price or foreign exchange price refers to the quote or amount involved in forex trading transaction. They are usually composed of a “bid” and an “ask.”
Forex price: Bid and ask
Forex bid refers to the price or amount that a foreign exchange trader manages to sell a currency pair. It is usually the lower amount in a forex price or quote, and is sometimes referred to as the sell price. Forex ask, on the other hand, is the price or amount that a foreign exchange trader manages to buy a currency pair. It is also called “offer.”
The difference between the Bid and the Ask is called the “Pip Spread,” or simply referred to as the “Spread.” This indicates the cost of the trader for each transaction or trade.
Reading forex price quotes
Forex price quotes are composed of two currencies forming a currency pair: one serves as the base currency, which always has the value of one (1). The most commonly-used currencies in foreign exchange trading are US dollar (USD), British Pound (GBP), Japanese Yen (JPY), Australian Dollar (AUD), Euro (EUR), and New Zealand Dollar (NZD).
The base currency is usually the left currency in a currency pair. The cross currency or the proportion of the second currency relative to the first frequency is usually the one on the right of a currency pair. A GBP/USD forex price quote of 1.6700 means that one British Pound is equal to 1.6700 US Dollars.
Price volatility and determinants of forex price action
Also known as Price Movement, Price Volatility refers to the rapid and continuous movement of the foreign exchange market. Foreign price action is highly dynamic. Changes in forex trading conditions change can change in a matter of a few seconds. A foreign exchange market can be volatile or stagnant. Volatile forex markets allow for greater opportunities to gain profit.
What influences foreign exchange price?
There are various factors affecting foreign exchange prices and movements of forex markets. Investment flows, economic conditions, and international trade affect the movement of foreign exchange markets. They are also influenced by factors that also affect bond, equity, and stock markets such as interest rates, political conditions, and inflation.
Forex price charts
Forex price charts refer to the tables and charts that reflect the movement of the foreign exchange market, as well foreign exchange prices. There are two types of forex price charts most commonly used in foreign exchange trading: the bar chart and the candlestick chart. Bar charts are linear graphic representations of forex market movements within a specified time frame. Candlestick charts provide the same information as bar charts, but they make use of color coding in showing the price values and transaction worth. Red is used to signify that the close is lower or less than the open. Blue is used when the close is higher or more than the open.
Forex trading refers to the act business of gaining profit from movements of the foreign exchange or currency trading market. It is done with the use of pairs of two currencies called “currency pairs.” The goal is to be able to sell currencies at a price higher than the amount it cost you, or to be able to buy them at price lower than when they’re sold.
Trading consists of buying and selling. The concept is simple: you have to gain profit from buying and selling. For example, you bought 10,000 units of British Pound for 16,700 US Dollars (which means that one British Pound is equal to 1.67 US Dollars). You waited for market to move, and soon, due to certain factors, the forex price reached a value of GBP/USD of 1.97. You sold your 10,000 units of British Pound and got 19,700 US Dollars. Then, you gained 3,000 US Dollars as profit.
There are variousforeign exchange companies offering forex services such as financial advices, forex investment management, and risk management strategy planning at a certain cost, which can be fixed or commission-based.