Bid, ask and the spread
Distinguish a quoted chart price from an executable price.
Technical terms explained
Bid
The quoted price at which you can sell the base currency, subject to available execution.
Ask
The quoted price at which you can buy the base currency, subject to available execution.
Spread
The difference between ask and bid. It is one part of trading cost.
Quote basis
Which price series forms the candles: bid, ask or the midpoint between them.
The bid is the price at which the counterparty buys the base currency from you; the ask is the price at which it sells it to you. Their difference is the spread. A chart may show bid, ask or midpoint candles. That display choice affects whether a stop or target appears to have been touched. Spreads and execution conditions can change.
Our operational rule
Ask minus bid is the spread; quote basis belongs in your test notes.
Worked example
Bid 1.08000 and ask 1.08012 give a spread of 0.00012, or 1.2 standard EUR/USD pips.
Counterexample
A midpoint candle touching a target does not prove an executable bid reached it for a long position.
Watch for this mistake
Ignoring transaction costs because the chart looks continuous.
Charts are synthetic. These classification rules are not evidence of profitability.
Source and conventions
OANDA · FX mechanics reference
Broker documentation supports standard quote/position mechanics. Contract terms and execution conventions can differ. No broker endorsement.
Read the source