If you are interested in the forex trading market, then you will need to understand all the terms that are used for trading. This is a volatile market and you need to know what you are doing before you jump in.  The word spread is the difference between the cost to purchase a currency and the price that you can sell it.

When it comes to the majors, the spread is usually 3 pips under the typical market conditions. When a price quote changes, the smallest unit of this change is called a pip. For those familiar with trading forex, they often hear about a 3-pip spread when they are trading the majors. When you compare the ask price and the bid, you will then see the spread.  You can easily calculate a pip on a  position or a contract.

If you think that the euro will strengthen against the US dollar, then you would choose to buy euro now and then later sell it back for a high price. Appreciation is the increased value of a currency and a Bear is a trader who believes prices are heading down. Bid is the price that is offered to you as a trader and Ask is the price that is asked by the trader. This is generally the least amount the seller will accept. If you are optimistic about the market then you are called a Bull.