Step by step
How to read it
- 1The chart shows the bid. This high stopped just short of the stop line.
- 2The ask is always one spread higher — here it reached the line.
- 3A short trade closes by buying — at the ask. So the stop was hit, though the chart never touched it.
Watch out
Common mistake
Placing a short trade’s stop exactly at a level on the chart. The ask reaches it first — by the size of the spread.
Hypothetical numbers
Worked example
- Example: bid 1.0850 · ask 1.0852.
- Buy → you pay 1.0852. Sell → you get 1.0850.
- The 2-pip gap is the spread.
In one line
Definition
The ask is the lowest price a seller accepts; the bid is the highest price a buyer pays. The gap between them is the spread.
Check yourself
Check yourself
You want to buy. Which price do you pay?