Buy
Trading BasicsTo open a long position by purchasing a currency pair at the ask price. You buy when you expect the base currency to strengthen against the quote currency.
What Does Buy Mean in Forex?
Buying in forex means opening a Long position on a Currency Pair. When you click "Buy" on your platform, you purchase the Base Currency and sell the Quote Currency at the current Ask Price. The ask price is always slightly higher than the Bid Price, and the difference is the Spread.
Buy Order Execution
Buy orders open at the ask price and close at the bid price. This means the market needs to move up by at least the spread amount before your position breaks even. For EUR/USD with a 1-pip spread, the price needs to rise 1 pip from your entry for you to start seeing profit.
Buy at Market vs. Buy Limit
A buy Market Order executes immediately at the current ask price. A buy Limit Order only fills if the price drops to your specified level, letting you enter at a better price. For example, if EUR/USD is at 1.0850, you could place a buy limit at 1.0820 to enter if the price pulls back.
Related Terms
Sell
To open a short position by selling a currency pair at the bid price. You sell when you expect the base currency to weaken against the quote currency.
Long
A trade position where you buy a currency pair expecting it to rise. Going long on EUR/USD means buying euros and selling US dollars.
Market Order
An order to buy or sell immediately at the best available price. Market orders guarantee execution but not a specific price.
Ask Price
The price at which the market (or broker) is willing to sell a currency pair to you. You buy at the ask price. Also called the offer price.