FOREX

Forex Ask and Bid Price

Investing and trading in Forex requires a good knowledge of the world market. Since the currencies you’re trading are actually in use, keeping up with what the countries are up to can be a quite challenging task. Nevertheless, this is the case with all types of trading and investment. While Forex trading can be very profitable, make sure to not drown in commissions and fees.

There is almost no way to avoid commission when trading but this is usually taking care of between the ask and the bid price. Most banks and financial institutions cover their fees this way. However, banks tend to have higher ask prices and lower bid prices compared to brokerage firms. While there are many

If that’s the case for you on the platform you’re trading, you won’t even see any fees aside from the ask and the bid price. Here is an example where we can help you understand how both works.

Ask Price: 1.10

Bid Price: 1.00

Actual Value of the Currency: 1.05

With that said, you always need to keep in mind the difference between the ask price and the bid price. Since most brokerage firms actually sell their own funds, they make money between these lines. You can also count this as commission since you won’t be buying the currency at its value and selling it at its value.

This is the sole reason why the ask price is always higher than the bid price. Otherwise, the brokerage firms and financial institutions that sell currencies won’t be able to make any money.

As for the best places where you can cut the costs of trading, we suggest using brokerage firms. Although banks and most other financial institutions allow you to buy and sell world currencies, you will be paying more for the ask price and be getting less for the bid price compared to brokerage firms. Learn more about getting started with Forex trading.

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