What Ask, Bid and spread on Forex?
Ask is the price at which a seller is willing to sell a financial instrument. Bid is the price at which a buyer is willing to pay. The spread is the difference between Ask and Bid, in fact it is the broker's profit. At the time of the purchase spread will be charged immediately at the Ask price, and the closing of the transaction occurs at the Bid price. At the time of sales the entrance is at the Bid price, and the closing of the transaction and charging a spread, Ask price is used. For shopping take profit should be increased by the value of spread, stop-loss does not need to touch. Sales stop-loss required to increase the magnitude of the spread so he didn't work ahead of time take profit do not need to touch. Activation of a pending order Buy Stop will happen before the level on the chart on the spread. Activation Sell Stop happens below the level on the chart on the spread. This should be considered while trading. The spread can be of two types:
Fixed – spread value remains unchanged and is specified in the trading conditions of the broker;
Floating – the value of the spread can fluctuate depending on the market situation (can expand during news release).
On ECN accounts the spread may be zero, in this case, the broker charges a Commission. This is particularly advantageous and convenient in scalping strategies.