<p><strong>Bid and Ask</strong> are key terms in Forex trading, representing the sell and buy prices respectively. The bid is the highest price a buyer is willing to pay for a currency, while the ask is the lowest price a seller is willing to accept.</p>
<p>Understanding bid and ask prices is crucial for traders, as it helps determine the <a href="/NewSite/encyclopedia/spread/" class="ency-link">spread</a> - the difference between the two, which is the broker's profit. For example, if the bid for EUR/USD is 1.12345 and the ask is 1.12350, the spread is 0.5 pips, which is the cost of trading that pair.</p>