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Market foundations

A price is a meeting

A trade prints only when a buyer and a seller agree.

Lesson 1 of 4 • 12 min

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Worked example

A trading screen with a bid on the left and an ask on the right
BuyerBid 1.1000The most they will paySellerAsk 1.1002The least they will takeThe trade prints in the middle
Example. The buyer will pay 1.1000. The seller wants 1.1002. A trade prints only if they meet. The last price is that meeting, not a forecast of the next one.

Study material only. It is not a signal to buy or sell. AcademyTrade is education. It is not a broker, not investment advice, and not a promise that you will make money. Trading can lose the money you deposit.

A price on a screen is not a mood and it is not a forecast. It is the record of a meeting. Someone willing to buy met someone willing to sell, and the trade was printed.

Before that meeting there are only two wishes. The bid is the highest price a buyer is currently willing to pay. The ask, also called the offer, is the lowest price a seller is currently willing to accept. If you want to buy immediately, you pay the ask. If you want to sell immediately, you sell at the bid.

The last price is history. It tells you where a trade already happened. It does not promise that the next trade will happen there. In a busy market the next trade may be a tick away. In a quiet market the next trade may be far away, because nobody is standing on the other side.

  • Read the bid and the ask, not only the last price.
  • A market with many orders near the current price can absorb a trade without jumping.
  • A market with nobody on the other side can jump on a small order.

Nothing in this lesson tells you to buy or sell. It tells you what the number on the screen actually is.

A price is a meeting · AcademyTrade