In forex trading, the terms "bid" and "ask" refer to the prices at which a

currency pair can be bought or sold. These prices are quoted in relation to the
base currency (the first currency in the pair) and are essential for
understanding the dynamics of the foreign exchange market. Here's an
explanation of bid and ask prices:

1. Bid Price: The bid price represents the maximum price that a buyer
(trader or investor) is willing to pay to purchase a specific currency pair.
It is the price at which the market or your broker is willing to buy the
base currency from you. The bid price is always lower than the ask price.
Traders who want to sell a currency pair would typically execute a trade
at the bid price.
2. Ask Price: The ask price, also known as the "offer" or "sell" price, is the
minimum price at which a seller (trader or investor) is willing to sell a
particular currency pair. It is the price at which the market or your broker
is willing to sell the base currency to you. The ask price is always higher
than the bid price. Traders who want to buy a currency pair would
typically execute a trade at the ask price.

The difference between the bid and ask prices is known as the "spread." The
spread represents the broker's profit and covers transaction costs. A narrower
spread is generally preferable for traders, as it means lower transaction costs.

For example, if the EUR/USD currency pair has a bid price of 1.1200 and an ask
price of 1.1202, the spread is 2 pips (the difference between 1.1202 and
1.1200). Traders can buy the pair at 1.1202 (ask) or sell it at 1.1200 (bid).

Understanding bid and ask prices is crucial for executing trades, determining
entry and exit points, and calculating transaction costs in the forex market.
 TYPES OF PENDING ORDER

In Forex trading, "sell limit," "sell stop," "buy limit," and "buy stop" are types of pending orders that
traders can use to specify entry points for their trades. Here's an explanation of each:

1. Sell Limit:
 A "sell limit" order is a pending order placed to sell a currency pair at a specified price
or better. It is used when a trader believes that the price may move higher in the
future and wants to sell at a predetermined higher level.
 The order will only be triggered if the market price reaches or goes above the
specified sell limit price.
2. Sell Stop:
 A "sell stop" order is a pending order placed to sell a currency pair at a price below
the current market price. It is used when a trader anticipates that the price may
decrease and wants to enter a short position if the market reaches or goes below a
certain level.
 The order will only be triggered if the market price reaches or goes below the
specified sell stop price.
3. Buy Limit:
 A "buy limit" order is a pending order placed to buy a currency pair at a specified
price or better. It is used when a trader believes that the price may move lower in the
future and wants to buy at a predetermined lower level.
 The order will only be triggered if the market price reaches or goes below the
specified buy limit price.
4. Buy Stop:
 A "buy stop" order is a pending order placed to buy a currency pair at a price above
the current market price. It is used when a trader anticipates that the price may
increase and wants to enter a long position if the market reaches or goes above a
certain level.
 The order will only be triggered if the market price reaches or goes above the
specified buy stop price.

In summary, "limit" orders are set at a specific price or better, while "stop" orders are set at a price
that triggers the execution when reached. Both buy and sell orders can be used with these variations
to plan entry points in the market. Traders use these orders to manage their trades and enter the
market under certain conditions.

ANOTHER EXPLANATION
Alright, imagine you have a toy that you really like, and you want to trade it with your friend's toy.
But, you only want to do the trade if your friend agrees to a certain condition. That's a bit like how
these things work in Forex trading, but instead of toys, it's about trading money!

1. Sell Limit:
 Let's say you have a special toy, and you think its value will go up in the future. You
tell your friend, "I'll trade this toy with yours, but only if its value goes up to a specific
level." That's like a "Sell Limit" in Forex.
2. Sell Stop:
 Now, imagine you have another toy, and you believe its value might go down soon.
You say to your friend, "I'll trade this toy if its value drops to a certain level." That's
similar to a "Sell Stop" in Forex.
3. Buy Limit:
 Now, let's turn it around. Suppose you want a specific toy your friend has, but you
only want to trade for it if its value drops a bit. You say, "I'll trade for your toy if its
value goes down to a certain level." That's like a "Buy Limit" in Forex.
4. Buy Stop:
 Lastly, let's say you really want a toy, but you think its value will go up soon. You tell
your friend, "I'll trade for your toy only if its value goes up to a certain level." That's
similar to a "Buy Stop" in Forex.

So, in Forex, traders use these "sell limit," "sell stop," "buy limit," and "buy stop" orders to plan their
trades based on specific conditions, just like you plan your toy trades with your friend based on the
toys' values. It helps them make sure they're getting the best deal!
Let’s break it down:

1. Buy Stop:
 A Buy Stop order is placed above the current market price (Ask Price). It is
used when a trader expects that the price will rise to a certain level and
wants to enter a long position if that level is reached.
2. Buy Limit:
 A Buy Limit order is placed below the current market price (Ask Price). It is
used when a trader believes that the price may decrease to a certain level
before moving higher, and they want to enter a long position at that lower
level.
3. Sell Limit:
 A Sell Limit order is placed above the current market price (Bid Price). It is
used when a trader anticipates that the price may increase to a certain
level before moving lower, and they want to enter a short position at that
higher level.
4. Sell Stop:
 A Sell Stop order is placed below the current market price (Bid Price). It is
used when a trader expects that the price will decrease to a certain level
and wants to enter a short position if that level is reached.

In summary:

 Buy Stop and Sell Stop are used to enter the market when the price surpasses a
certain level.
 Buy Limit and Sell Limit are used to enter the market at a specific price or
better, and they are placed away from the current market price.

These orders help traders plan their entries and exits based on anticipated price
movements in the market.
Horizontal Line in the Chart
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Ask Price - Horizontal Red LIne - Buy

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Buy Entry at Market Order meaning I executed the entry at the exact line of
current Ask Price.

Buy Entry at Pending Order means I excuted the entry at my preferred level.

4 Types of Pending Orders

Buy Stop above the Ask Price.

Sell Limit above the Bid Price.

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Take Profit will only be exected once the Bid Price reaches my Buy Entry.