July 17, 2008

How to Read Forex Quotes Correctly

This is because when you trade in Forex, in effect you're buying one currency and selling a second currency at the same time, or trading them. Therefore, when you read Forex quotes, the second currency listed is going to be your quote currency, and the first currency listed is going to be your base currency.

The exchange rate says how many units of the quote currency you have to pay to get one unit of the base currency. With the above example, the quote currency is the US dollar; the base currency is the euro. This price quote illustrates how each currency is trading in relation to the other. Therefore, as a trader, you buy at the bid price, or the first price quoted. Read More Here

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