Trading Knowledge - What is Forex Trading and How Does It Work: Part 2

Welcome to part two of this video where we’ll expand on how forex works.

The exchange rate of a currency pairs is typically quoted to four decimal places. For example, the EUR/USD pair might be quoted as 1.1129/30. In this case, the bid or the sell price is 1.1129 and the ask or the buy price is 1.1130. The last digit in the quote is known as a pip. Here, the spread or the difference between the buy and the sell price is 0.0001 or 1 pips.