Bid, Ask, Spread, and Orders

A broker quote normally contains two prices:

• The bid is the price available when selling.
• The ask is the price available when buying.

The difference between them is the spread. A trade therefore begins with a small cost before fees, financing, or slippage are considered. Spreads can widen when liquidity is thin or uncertainty is high, especially around major news.

Common order instructions

Market order

A request to trade at the best available price. Execution may differ from the price visible when the button was pressed, particularly in fast conditions.

Limit order

A request to trade only at a specified price or better. It controls the acceptable price but does not guarantee that the order will fill.

Stop entry order

An instruction that activates after price reaches a chosen level. It is often used for breakout participation, but activation can occur during a brief spike.

Stop-loss order

An instruction intended to close a losing position after a defined invalidation level is reached. It is an essential risk control, but gaps and slippage mean the final execution price is not always guaranteed.

Order type does not replace a trade plan

Before sending any order, define the reason for entry, invalidation point, position size, and conditions that would cause you to stand aside. A sophisticated order attached to an undefined idea is still an undefined trade.

Practice

Open a demo order ticket without submitting it. Locate the bid, ask, spread, position-size input, stop-loss input, and estimated margin. Record any terminology your broker uses differently and check its documentation.

Key takeaway

The displayed chart price is not the whole transaction. Bid, ask, spread, order type, and execution conditions all affect the real trade.