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What is the ask price

If you want to buy a currency in the Foreign Exchange Trading Market you need to know its price: it is called "ask (or offer) price (or quote)" and it usually appears on the right side of the pair quote.

A little example will show it clearly: if the quote of the cross pair EUR/USD is 1.2330/35 this means that you can buy 1 Euro for 1.2335 US Dollars.
Who purchases believes (and hopes) that the value of the currency he has just bought rises, so that he can profit afterwards from its sale.
If, after the FX purchase of the previous example, the currency cross pair EUR/USD strengthens its value to 1.2340/45 and we decide to sell it, we will gain 5 pips.

In the currency market, just like in every other kind of business, there are several methods and strategies but none of them is the "absolutely right one".
The most simple and common suggestion is to consider, before each transaction, the "law of supply and demand": the more the market sell the lower the prices get and "vice versa".
And this is also the reason why the ask price of a pair is always higher than its bid one: the ask price represents the minimum quote the market is willing to accept to sell an FX currency pair.

As we explain in the "bid-price-section" the difference between the bid price and the ask one is called "bid/ask spread" and it is determined by the activity of the market (liquidity): during a transaction every trader pays the spread at least once, placing an order or closing his position.
Even if the large liquidity of the online FX trading market doesn't bring about wide bid/ask spreads, you will always need more money to enter the market long (buy).

So, we want to give you a last, maybe banal suggestion.
When asking a broker for the quote of an FX currency pair don't add any other detail about your intentions, whether you want to go "long" or "short": most brokers are nowadays reliable and completely trustworthy but it is not difficult to realize that, if they know what a trader is going to do, they have a significant advantage and possibly don't offer the best price they can.

The same caution should be used with electronic systems: prefer the ones that allow you to know the exact price before selecting a "buy" or "sell" option.
 
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