Introduction 
Many beginners lose money not because of wrong analysis — but because they enter trades at the wrong price.
This happens due to something called:
👉 Bid price & Ask price
If you don’t check this before trading, you may start your trade already in loss.
📊 Simple Explanation
- Bid Price = Price buyers are willing to pay
- Ask Price = Price sellers want
👉 The difference is called Spread (your hidden cost)
📱 Where to Check Bid & Ask (Real Platforms)
You can check it on:
- Zerodha Kite
- TradingView
- Binance
Look for:
✔ Order Book
✔ Market Depth
✔ Buy/Sell panel
⚙️ Step-by-Step: How to Check Before Trading
🟢 Step 1: Open Stock or Crypto
Example:
Open any stock like Reliance / Bitcoin
🟢 Step 2: Open Market Depth (Most Important)
👉 You will see 2 sides:
| BUY (Bid) | SELL (Ask) |
|---|---|
| ₹100 | ₹101 |
| ₹99.80 | ₹101.20 |
👉 Left = Buyers
👉 Right = Sellers
🟢 Step 3: Check Top Price
👉 First row is most important:
- Highest Bid = best buyer price
- Lowest Ask = best seller price
🟢 Step 4: Calculate Spread
👉 Formula:
Spread = Ask – Bid
Example:
₹101 – ₹100 = ₹1
🟢 Step 5: Decide Trade
✅ GOOD TRADE
- Spread small (₹0.10 – ₹0.50)
- High volume
👉 Safe to enter
❌ BAD TRADE
- Spread large (₹2–₹10+)
- Low volume
👉 Avoid
📉 Real Example (Beginner Mistake)
You place Market Buy:
- Ask = ₹101
- Instantly price shows ₹100
👉 You lose ₹1 immediately
WHY?
Because you bought at ask, but market shows bid
🧠How PRO Traders Check (Secret)
Before entering:
✔ Check chart
✔ Check trend
✔ Check volume
✔ THEN check bid-ask
👉 If spread is high → skip trade
⚡ Pro Tips (Very Important)
🔥 Tip 1: Always Use Limit Orders
👉 Don’t buy at market price blindly
Example:
- Current Ask = ₹101
- You place order at ₹100
✔ You control entry
🔥 Tip 2: Trade High Liquidity Assets
👉 Examples:
✔ Large-cap stocks
✔ Index (NIFTY, BANKNIFTY)
✔ Major crypto (BTC, ETH)
🔥 Tip 3: Avoid These Times
❌ Market opening (high volatility)
❌ News time
❌ Low volume hours
🔥 Tip 4: Check Order Size
👉 If large orders on one side:
✔ More buyers → price may go up
✔ More sellers → price may fall
📊 Advantages
✔ Better entry price
✔ Lower cost
✔ Higher win rate
✔ Professional trading approach
❌ Disadvantages
❌ Takes extra time
❌ Requires practice
❌ Beginners ignore it
🎯 Summary
- Bid = Buyer price
- Ask = Seller price
- Spread = Trading cost
👉 Before trading always:
✔ Check market depth
✔ Calculate spread
✔ Use limit order
✔ Avoid high spread
FAQ
Q1: What is bid and ask price in trading?
👉 Bid is buyer price, ask is seller price.
Q2: Why is spread important?
👉 It shows trading cost.
Q3: How to reduce spread loss?
👉 Use limit orders and trade liquid assets.
Next Lesson
👉 “What Is Market Depth? Full Beginner Guide”
👉 “Order Book Strategy (Advanced Trading)”
No comments:
Post a Comment