{"id":37971,"date":"2026-09-08T05:52:00","date_gmt":"2026-09-08T05:52:00","guid":{"rendered":"https:\/\/www.wisuno.com\/uk\/?post_type=wisuno_lesson&#038;p=37971"},"modified":"2026-09-08T05:52:00","modified_gmt":"2026-09-08T05:52:00","slug":"how-to-read-a-forex-quote","status":"publish","type":"wisuno_lesson","link":"https:\/\/www.wisuno.com\/uk\/academy\/how-to-read-a-forex-quote\/","title":{"rendered":"How to Read a Forex Quote: Base, Quote and Spread"},"content":{"rendered":"<p>A forex quote has two currencies, two prices and a cost between them. Learn to read one and work out what the spread charges you on entry.<\/p>\n<h2>What the two currencies in a forex quote mean<\/h2>\n<p>A forex quote names two currencies, in a fixed order.<\/p>\n<p>The first is the <strong>base currency<\/strong>, the second the <strong>quote currency<\/strong>. The price is how many units of the quote currency buy one unit of the base.<\/p>\n<p>EUR\/USD at 1.0850 means one euro costs 1.0850 US dollars. The base is what is priced; the quote is the money doing the pricing. Buying the pair buys the base and sells the quote; selling reverses that.<\/p>\n<p>The order is convention, not a choice: you will see EUR\/USD and USD\/JPY, never USD\/EUR or JPY\/USD. Why every position holds two currencies at once is covered in <a href=\"\/uk\/academy\/what-is-forex-trading\/\">what forex trading is<\/a>.<\/p>\n<h2>Bid, ask and the spread<\/h2>\n<p>A quote shows two prices.<\/p>\n<ul>\n<li>The <strong>bid<\/strong> is the lower one. It is where you can sell.<\/li>\n<li>The <strong>ask<\/strong>, or offer, is the higher one. It is where you can buy.<\/li>\n<\/ul>\n<p>Both are stated from the broker&#8217;s side: the bid is what the broker bids to buy from you.<\/p>\n<p>The gap between them is the <strong>spread<\/strong>, and it is the cost of opening. You buy at the ask, and from that instant the position is valued at the bid, so it opens showing a small loss equal to the spread. A position that has not moved is not flat; it is behind by that amount before the market has done anything.<\/p>\n<p>Some platforms show both prices, others one price and the spread separately. Either way, check the spread before clicking. Typical spreads by instrument and account type are published on the <a href=\"\/uk\/costs-charges\/\">costs and charges<\/a> page.<\/p>\n<h2>How to read the decimal places<\/h2>\n<p>Most pairs are displayed to five decimal places: 1.08503.<\/p>\n<p>The fourth decimal is the <strong>pip<\/strong>, the standard unit of movement. The fifth is one tenth of a pip, usually called a point or pipette. Yen pairs are the exception, quoted to three decimals \u2014 157.482 \u2014 where the second decimal is the pip.<\/p>\n<p>This is where quick reading goes wrong. A price moving from 1.08503 to 1.08509 has moved six points, a little over half a pip. Read it as six pips and every figure after it is ten times too large.<\/p>\n<p>It also explains how spreads are written. A spread of &#8220;1.2&#8221; means 1.2 pips, a gap of 12 in the final digits: 1.08503 bid against 1.08515 ask. What one unit of movement is worth in money is covered in <a href=\"\/uk\/academy\/pips-lots-and-contract-size\/\">pips, lots and contract size<\/a>.<\/p>\n<h2>Why spreads widen<\/h2>\n<p>On most accounts the spread is variable, reflecting what liquidity providers are quoting at that moment. It is widest around scheduled data releases, in the thin hours after New York closes, at the daily rollover and at the Sunday open. Exotic pairs are always wider than majors.<\/p>\n<p>That carries a practical cost. A stop-loss on a long position triggers off the bid, so a widening spread pulls the bid down even though the market has not moved. A stop placed a few pips away can be reached by the widening alone. Check the spread before placing an order.<\/p>\n<h2>Worked example: reading a GBP\/USD quote<\/h2>\n<p>Assume GBP\/USD is quoted 1.27180 \/ 1.27192. The numbers are illustrative.<\/p>\n<p><strong>The currencies.<\/strong> GBP is the base, USD is the quote. One pound costs 1.27192 dollars to buy and can be sold for 1.27180.<\/p>\n<p><strong>The spread.<\/strong> 1.27192 minus 1.27180 is 0.00012, which is 12 points, or 1.2 pips.<\/p>\n<p><strong>The cost.<\/strong> You open 0.20 lots, which is 20,000 units. One pip on 0.20 lots of GBP\/USD is worth about $2, so a 1.2-pip spread costs about $2.40 the moment the position opens. The bid then has to climb 1.2 pips, back to 1.27192, just to bring the position level.<\/p>\n<p>From there, pip value does the rest. If the bid falls 10 pips to 1.27080, that is about $20 off your balance, on top of the $2.40. A 10-pip move the other way is worth the same $20, in the other direction, less the spread.<\/p>\n<p>Open the same trade with the spread widened to 4 pips before a data release and it starts about $8 behind instead of $2.40.<\/p>\n<h2>Key takeaways<\/h2>\n<ul>\n<li>The first currency is the base, the second is the quote, and the price is how many units of the quote buy one base unit.<\/li>\n<li>You buy at the higher ask and sell at the lower bid, so every position opens behind by the spread.<\/li>\n<li>On a five-digit quote the fourth decimal is the pip and the fifth is a tenth of one, so a spread of &#8220;1.2&#8221; is 12 units of the final digit.<\/li>\n<li>Spreads widen around data releases, rollover and thin hours, which can bring a nearby stop-loss into reach without the market moving.<\/li>\n<\/ul>\n<h2>Frequently asked questions<\/h2>\n<p><strong>Why does my trade show a loss the moment I open it?<\/strong><\/p>\n<p>That is the spread, not a platform error. You bought at the ask, and the position is immediately valued at the bid you could sell it back at. The gap between the two shows as a small loss until the market moves far enough to cover it.<\/p>\n<p><strong>What does a five-digit forex quote mean?<\/strong><\/p>\n<p>It means the broker prices in fractions of a pip. The fourth decimal is the pip; the fifth is one tenth of it, which allows tighter spreads than whole-pip pricing. Count movement in the fourth decimal, not the fifth, or your figures come out ten times too high.<\/p>\n<p><strong>Is a tighter spread always cheaper?<\/strong><\/p>\n<p>Not by itself. Accounts often trade a tighter spread against a per-lot commission, so compare the full cost of opening and closing. A variable spread is also tight in calm conditions and wider around news, so a typical figure is a starting point, not the price you always get.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A forex quote has two currencies, two prices and a cost between them. Learn to read one and work out what the spread charges you on entry. What the two currencies in a forex quote mean A forex quote names two currencies, in a fixed order. The first is the base currency, the second the [&hellip;]<\/p>\n","protected":false},"featured_media":0,"menu_order":0,"template":"","meta":{"footnotes":""},"lesson_track":[203],"lesson_topic":[],"class_list":["post-37971","wisuno_lesson","type-wisuno_lesson","status-publish","hentry","lesson_track-beginner"],"_links":{"self":[{"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/wisuno_lesson\/37971","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/wisuno_lesson"}],"about":[{"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/types\/wisuno_lesson"}],"version-history":[{"count":1,"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/wisuno_lesson\/37971\/revisions"}],"predecessor-version":[{"id":37972,"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/wisuno_lesson\/37971\/revisions\/37972"}],"wp:attachment":[{"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/media?parent=37971"}],"wp:term":[{"taxonomy":"lesson_track","embeddable":true,"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/lesson_track?post=37971"},{"taxonomy":"lesson_topic","embeddable":true,"href":"https:\/\/www.wisuno.com\/uk\/wp-json\/wp\/v2\/lesson_topic?post=37971"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}