Before you start
Reading a forex quote is easier when a few basics are clear. Keep the provider's own pricing details open beside you, because each provider labels its prices in a slightly different way.
- You know that a currency pair sets the price of a currency in terms of another.
- You know that rules and prices can vary by country and by provider, and where to check them.
- You have the pricing details or contract information ready to compare.
Base and quote currency
Every forex pair has a base currency and a quote currency. The base currency comes first in the pair name, and it is the currency you buy when you buy the pair. The quote currency comes after it, and it is the currency that the price is expressed in.
A quote for the euro against the dollar tells you how many dollars a euro costs. If that price rises, the euro has become more expensive in dollars. Read the pair from left to right each time, because reversing the order flips the meaning.
Bid and ask prices
Most quotes show a bid price and an ask price. The bid is the price at which the provider will buy the base currency from you, which is the price you receive when you sell. The ask is the price at which the provider sells the base currency to you, which is the price you pay when you buy.
The ask is normally higher than the bid. The gap between them is the spread, and you pay it on every round trip, because you buy at the ask and sell at the bid. A wider spread means the price has to move further before you break even. Find the spread in the quote or in the provider's pricing details before you decide. The glossary entry on the euro dollar spread explains how this is usually quoted.
Pips and lot sizes
A pip is the standard unit for measuring a change in a currency price. It is a small fixed step at a set decimal place, and pairs that include the yen use a different decimal place because they are quoted with fewer decimals. Spreads and price moves are often measured in pips, so the same unit appears across many quotes.
A lot is the fixed size of an order in the base currency. A standard lot is the usual full-size contract, and smaller lots are fractions of it. Lot size changes how much each pip move is worth in your account currency, so a quote on its own does not show the full cost. Lot size also affects how much margin a trade needs. Check the contract size with the provider, because it varies between providers.
Steps to read a quote
Use this order when you look at any forex quote. Each step builds on the step before it.
- Identify the base currency and the quote currency from the pair name.
- Find the bid price and the ask price.
- Subtract the bid from the ask to find the spread.
- Convert that spread into pips using the rule for that pair.
- Check the lot size the quote applies to, so you know what each pip move is worth.
- Compare the spread with the other costs the provider adds, such as commission.
When a quote looks wrong or incomplete
If the bid and ask look the same, the quote may be a single mid price. Look for a separate spread figure, or check the provider's pricing details. If a pair seems to move the wrong way, check which currency is the base, since you may be reading the price in the wrong direction.
If a quote does not include a spread or a pip value at all, do not assume the cost is absent. Check the provider's own terms or the guidance from your local authority on how prices must be quoted. Rules on price display vary by country and by provider. If the figures still do not add up, ask the provider to explain the quote before you place any order.
Using quotes to compare forex brokers
Reading quotes correctly helps you compare providers on what you would actually pay. Providers can offer similar headline prices but use different spreads, and that gap adds up across many trades. Compare spreads for the same pair and the same lot size so the comparison is fair.
Trading currencies can lose money, and a wider spread puts you further behind from the start. If you are weighing your options, the guide on choosing a forex provider covers cost, safety and account types. You can also browse the forex broker comparisons for a wider set of providers. Check each provider's own terms and your local authority before you commit any money.