Bid and Ask Prices in Forex: Which Price Do You Get?

Look at any forex quote and you will see two prices side by side. One is the price at which the market will buy from you, and the other is the price at which it will sell to you. Knowing which price applies to your order avoids a lot of confusion about entries, exits and stop-losses.

The bid and the ask

• The bid price is the highest price a buyer (your broker or its liquidity providers) is currently willing to pay for the base currency. It is the price you sell at.
• The ask price (also called the offer) is the lowest price a seller is currently willing to accept. It is the price you buy at.

Quotes are usually written bid first, then ask. Assume EUR/USD is quoted at 1.0850 / 1.0852 (illustrative). You could sell euros at 1.0850 or buy euros at 1.0852. The 2-pip difference is the spread, covered in What is spread?.

Which price applies to your trade

A simple way to remember it: you always buy at the higher price and sell at the lower price. That is how the spread is collected.

The mid price

The mid price is halfway between bid and ask:

Mid price = (bid + ask) ÷ 2

With a quote of 1.0850 / 1.0852, the mid price is 1.0851. Currency converters and news reports often show mid prices, but you cannot normally trade at the mid price on a retail account.

Worked example 1: a long trade

Assume the EUR/USD quote is 1.0850 / 1.0852. You buy 10,000 units (pip value $1).

• You open at the ask: 1.0852.
• Later the quote is 1.0880 / 1.0882.
• You close by selling at the bid: 1.0880.
• Result: 1.0880 − 1.0852 = 0.0028, or 28 pips.
• Profit: 28 × $1 = $28, before any commission.

Notice the market's bid moved 30 pips (1.0850 to 1.0880), but your profit is 28 pips. The 2-pip spread made up the difference.

Worked example 2: a short trade

Using the same starting quote of 1.0850 / 1.0852, you sell 10,000 units.

• You open at the bid: 1.0850.
• Later the quote is 1.0820 / 1.0822.
• You close by buying at the ask: 1.0822.
• Result: 1.0850 − 1.0822 = 0.0028, or 28 pips.
• Profit: 28 × $1 = $28, before any commission.

Again, the spread reduces the result. You can check scenarios like these with the Profit/Loss Calculator.

Bid, ask and your charts

Many platforms draw their price charts using bid prices. This matters for orders on short positions:

• A buy stop or buy limit (including a stop-loss or take-profit on a short trade) is triggered by the ask.
• A sell stop or sell limit (including a stop-loss or take-profit on a long trade) is triggered by the bid.

Suppose you are short EUR/USD with a stop-loss at 1.0900. If the bid peaks at 1.0898 while the spread is 3 pips, the ask reaches 1.0901 and your stop is triggered, even though the bid chart never touched 1.0900. This is especially likely when spreads widen around news or quiet hours. Learn more about stops in What is a stop-loss?.

Execution and moving prices

Quotes change constantly. By the time an order reaches your broker, the price may have moved, so your fill can be slightly different from the price you saw. How and when orders are filled is called execution. In fast markets, the difference between the requested and actual price can be larger.

Common mistakes

• Expecting to buy at the chart price. If the chart shows bid prices, you buy higher, at the ask.
• Forgetting the spread when setting targets. A long trade's take-profit is hit by the bid, not the ask.
• Setting tight stops on shorts near the chart high. The ask can trigger the stop first.
• Assuming mid prices are tradable. Retail orders execute at the bid or ask.

Summary

The bid is where you sell, and the ask is where you buy. Long trades open at the ask and close at the bid; short trades open at the bid and close at the ask. The gap between them, the spread, is a cost on every trade, and it also affects when stop and limit orders are triggered. Knowing which side of the quote applies helps you plan entries, exits and risk more accurately.