What is a Bid Price/What is an Ask Price? | FXTM Learn Forex in 60 Seconds

What is a Bid Price/What is an Ask Price? | FXTM Learn Forex in 60 Seconds

November 9, 2019 1 By Luis Garrison


When trading in the markets, people place pending orders, which are predefined prices to buy or sell an asset at some point in the future. Once the price of the instrument they are trading reaches a certain level, the order is executed. The two most popular pending orders that traders place are the “Buy Stop” and the “Sell Stop”. Buy Stop is the price level set by the trader when they wish to buy their asset in the future. Sell Stop is the price level set by the trader when they wish to sell their asset in the future. The predefined price for the Sell Stop is always lower than the current market price of the asset in question. In the following example, you can see that this trader set a Sell Stop at 1.20000. This trader anticipates that the price of his asset will fall. The predefined price for the Buy Stop is always higher than the current market price of the asset in question. In the following example, you can see that this trader set a Buy Stop at 1.24000. This trader anticipates that the price of his asset will keep rising.