Forex bid and ask chart
The question arises due to the nature of how prices are represented in Forex, and how they are shown in MT4.
There are 2 sets of prices. One set represents where the buyers are and is known as the BID. The other set represents the sellers and is known as the ASK. The BID price values are below the ASK price values because buyers want to buy as cheap as possible and sellers want to sell as high as possible. On the MT4 platform an important setting to make is to ensure you can see the ASK line so you have a point of reference as to where the current ASK price is.
See the attached picture - forex bid and ask chart. This will allow you to see the price where you will actually buy if you go long or exit a short position. If you decide to enter a trade long you are looking to buy. In order to buy you have to find a seller. The sellers are at the ASK price. Attached is a picture bidask. The entry of the trade at You may say "How can this be correct?
The reason is that the chart is only displaying the candlesticks based on the BID price. At the time of entry at the high of the candle the spread had widened to 3. Note forex bid and ask chart this is a Tradestation chart so will look a little different to MT4.
If you only had placed a Pending Buy order at a little above the high of the Having entered a long trade you have now effectively become a potential seller. You bought from a seller and are long. To exit your long you have to sell. Consequently the prices shown by the candles now represent the prices where any exit from the trade will be filled. However, if you go short the opposite is true.
When you enter short you are selling and need a buyer. The buyers are the the BID. Once you have sold, you have become a potential buyer and to exit the trade you need to buy and to buy you need to look at the ASK line where the sellers are. Let's assume the spread is at 2. Forex bid and ask chart have a stop loss at 0. You will find that your trade will be stopped out at 0. Conversely, if your trade is moving into profit and you have a profit target at 0. If the BID price forex bid and ask chart at 0.
So - ensure you are aware of what prices are relevant to the trade you take. See summary picture bidask3. No person, institution, or entity, including the Apiary Investment Fund, can guarantee a return on investment for such transactions. Neither the Apiary Investment Fund nor its representatives will recommend the purchase, sale, or transaction advice for a specific security.
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Ok, so far so good, but what does this mean for trading? Entries may not match the candle prices. Exits may not match the candle prices.
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