Ask Price:
The ask price is the lowest price at which sellers are willing to sell a currency pair in the forex market. It is displayed on the right side of a quote. For example, in a EUR/USD quote of 1.1100/1.1102, the ask price is 1.1102.
Bid Price:
The bid price is the highest price buyers are willing to pay for a currency pair, appearing on the left side of a quote. In the example of EUR/USD at 1.1100/1.1102, the bid price is 1.1100.
Key Points
- Bid Price: The maximum price a buyer is willing to pay.
- Ask Price: The minimum price a seller is willing to accept.
- Spread: The difference between the bid and ask prices. A narrower spread suggests higher liquidity.
Our simulated trading environment mirrors live market conditions to help you understand these dynamics.
Slippage:
Slippage occurs when the execution price of a trade differs from the expected price, often during rapid market changes or execution delays, such as around major news events or market openings.
Example of Slippage:
If you set a market order to sell EUR/USD at a take profit (TP) of 1.1500 and a stop loss (SL) of 1.1050, a sudden economic announcement may cause the market to fluctuate, leading to execution at slightly different prices (e.g., TP at 1.1495 and SL at 1.1025), affecting expected profit and loss margins. Our trading simulations mimic these live market nuances.
Swap:
Swap refers to the interest differential between two currencies in a trade, applicable when a position is held overnight. Whether you pay or earn swap depends on your trade direction and the interest rates.
Triple Swap:
A three-day interest adjustment, typically applied on Wednesday, accommodates the weekend.
Rollover Period:
The rollover period is when trades move from one trading day to the next, during which swaps are calculated and applied. Wider spreads during volatile or low-liquidity periods reflect heightened market risk and increase trading costs.
Margin:
Margin is the collateral required to open and maintain a position, set by brokers and dependent on trade size and leverage.
Leverage:
Leverage allows traders to manage larger positions with less capital, expressed as a ratio (e.g., 100:1), enhancing potential gains and risks.
Equity:
Equity is the real-time value of your trading account, reflecting open positions and their unrealized gains or losses. Our environment provides realistic simulations to help traders understand and manage these factors effectively.
Spread:
The spread is the difference between the buy and sell prices of a currency pair. For example, a bid/ask spread of 2 pips in EUR/USD means the value must rise by at least 2 pips for a profit to be possible. It directly influences profitability; narrower spreads can lower the breakeven point, while wider spreads may increase costs and reduce profits.
Our simulated trading reflects live conditions, helping you navigate and strategize effectively in real-time markets.
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