The bid is the price you can sell at; the ask is the price you can buy at. The ask is always slightly higher, and the gap between them is the spread. You buy at the ask and later sell at the bid, so both numbers matter when you open and close a trade.
Reading a two-sided quote
A quote might show EUR/USD as 1.1050 / 1.1051. The lower number, 1.1050, is the bid - what a buyer in the market will pay you if you sell. The higher number, 1.1051, is the ask - what a seller wants if you buy. The one-pip gap is the spread.
Why every trade starts slightly down
Because you buy at the ask and sell at the bid, opening a position immediately puts you behind by the spread. Buy EUR/USD at 1.1051 and, if you closed instantly, you would sell at 1.1050 - a one-pip loss. Price has to move in your favor by at least the spread before you are even. The same is true for a short trade.
Why two prices exist at all
There is always someone willing to buy and someone willing to sell, and the market maker sits in the middle, profiting from the small gap. That gap is the price of instant execution - the compensation for whoever takes the other side of your trade. It is not a trick; it is how liquidity is provided.
Important: charts usually plot the bid price, but your buy fills at the ask. That small discrepancy is exactly why a realistic backtest must account for the spread rather than assuming you enter and exit at one clean price.
See both sides on real trades
When you backtest in a simulator that models the spread, you feel the bid-ask gap on every entry: the trade opens slightly negative and has to earn back the spread first. Experiencing that repeatedly makes the two-price reality of the market second nature - and it feeds directly into where you place stops and how you judge tight targets.
Bid and ask FAQ
What is the difference between bid and ask price?
The bid is where you sell; the ask is where you buy. The ask is always slightly higher, and the gap is the spread. You buy at the ask and sell at the bid.
Do you buy at the bid or the ask?
You buy at the ask and sell at the bid. Because the ask is higher, a new trade starts down by the spread and needs a favorable move to break even.
Why are there two prices in forex?
There is always a buyer and a seller, and market makers profit from the small gap between them. That gap, the spread, is the cost of instant execution.