Bid and ask: meaning in forex and gold trading
The bid is the price at which you can sell and the ask (or offer) is the price at which you can buy; the gap between them is the spread.
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Bid and ask: The bid is the price at which you can sell and the ask (or offer) is the price at which you can buy; the gap between them is the spread.
Reading a two way quote
A forex quote such as GBP/USD 1.33980 / 1.33992 shows the bid first and the ask second. If you sell, you get the bid. If you buy, you pay the ask. Most charts plot the bid price only, which is why buy orders and stop levels can behave differently from what the chart shows.
Which price closes your trade
A long position opens at the ask and closes at the bid. A short position opens at the bid and closes at the ask. So a sell stop on a long trade triggers when the bid reaches it, and a buy stop on a short trade triggers when the ask reaches it. When the spread widens, short positions can be stopped out even if the bid chart never touched the level.
Worked example
You short USD/JPY at the bid of 156.200 with a stop at 156.500. Around a data release the spread widens from 1 to 6 pips. The bid reaches 156.450 while the ask touches 156.510, so your stop is filled even though the bid chart peaked below your level.
Common mistakes
- Assuming the chart price is the price you will get.
- Setting short stops without allowing for the spread.
If you follow trade signals, for example the gold signals or EUR/USD signals, understanding this term helps you size and manage each trade yourself. The free Forexuro Telegram channel shares daily market updates where these ideas are used in practice.
Related terms
Tools and guides
Frequently asked questions
Is the ask always higher than the bid?
Yes, in a normal market the ask is above the bid; the difference is the spread.
Which price does my chart show?
Most platforms chart the bid price by default.
Education only, not financial advice. Trading forex, gold and CFDs carries a high risk of losing money, and leverage magnifies both gains and losses. Past performance is not a reliable guide to future results. Read our risk disclosure.