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The spread is the difference between the bid and ask price.The “big figure quote” is the dealer expression referring to the first few digits of an exchange rate. These digits are often omitted in dealer quotes. For example, the USD/JPY rate might be 118.30/118.34, but would be quoted verbally without the first three digits as…

The ask/offer is the price at which the market is prepared to sell a specific currency pair in the forex market. At this price, you can buy the base currency. It is shown on the right side of the quotation. For example, in the quote EUR/USD 1.2812/15, the ask price is 1.2815. This means you…

The bid is the price at which the market is prepared to buy a specific currency pair in the forex market. At this price, the trader can sell the base currency. It is shown on the left side of the quotation. For example, in the quote GBP/USD 1.8812/15, the bid price is 1.8812. This means…

One-tenth of a pip. Some brokers quote fractional pips, or pipettes, for added precision in quoting rates. For example, if EUR/USD moved from 1.32156 to 1.32158, it moved 2 pipettes.

A pip is the smallest unit of price for any currency. Nearly all currency pairs consist of five significant digits and most pairs have the decimal point immediately after the first digit, that is, EUR/USD equals 1.2538.In this instance, a single pip equals the smallest change in the fourth decimal place – that is, 0.0001. Therefore, if…

The base currency is the first currency in any currency pair. The currency quote shows how much the base currency is worth as measured against the second currency. For example, if the USD/CHF rate equals 1.6350, then one USD is worth CHF 1.6350.In the forex market, the U.S. dollar is normally considered the “base” currency for quotes,…

The eight most frequently traded currencies (USD, EUR, JPY, GBP, CHF, CAD, NZD, and AUD) are called the major currencies or the “majors.” These are the most liquid and the most sexy. All other currencies are referred to as minor currencies.

As in any new skill that you learn, you need to learn the lingo… especially if you wish to win your love’s heart. You, the newbie, must know certain terms like the back of your hand before making your first trade.Some of these terms you’ve already learned, but it never hurts to do a little…

The question of which is a better option between fixed and variable spreads depends on the need of the trader.There are traders who may find fixed spreads better than using variable spread brokers. The reverse may also be true for other traders. Generally speaking, traders with smaller accounts and who trade less frequently will benefit…

Variable spreads aren’t ideal for scalpers. The widened spreads can quickly eat into any profits that the scalper makes. Variable spreads are just as bad for news traders. Spread may widen so much that what looks like a profitable can turn into an unprofitable within a blink of an eye.