I just realized that most people still don't truly understand Bid and Offer. They are fundamental basics of trading that some people overlook entirely.

Simply put, Bid is the price that buyers are willing to pay, and Offer is the price that sellers are willing to accept. These two numbers tell us a lot about the actual market conditions. When demand exceeds supply, Bid and Offer prices will move upward because people are willing to pay more. Conversely, when there are many stocks but no one is buying, both prices will fall.

It's like market negotiation. Buyers try to offer lower prices, sellers try to sell at higher prices. The difference between these two prices is called the spread. It indicates how liquid the market is. A narrow spread means trading is easy and prices are close together. A wide spread indicates higher risk.

There are techniques for observing Bid and Offer. If both Bid and Offer are narrow, it shows a trend but not many traders are involved yet. Watch whether buying activity is coming in. If Bid is narrow but Offer is wide, big investors might be preparing, and prices could continue to rise. A wide Bid but narrow Offer often occurs at the end of a trend, and caution is advised.

Why is it important to pay attention to Bid and Offer? Because it helps us understand what the market is doing. It indicates supply and demand, and improves the use of Limit Orders or Stop Losses. Once you understand this, your trading will become more skillful.

The difference between Bid and Offer is that Bid is the highest price a buyer is willing to pay, and Offer is the lowest price a seller will accept. Offer prices are usually higher than Bid because sellers expect more, while buyers try to negotiate lower. For example, if you see Stock A at $173, but when you buy, you pay $173.10, the difference is because the Offer price is higher than the displayed price.

Another point is that when multiple bids are offered, the highest bidder wins. This benefits sellers because they get a better price. But for Offers, there is no such competition; sellers just set the price they are willing to accept.

Regarding stocks, if you believe the price will go up, you bid at a fair price. When the price rises, you switch to selling. Now, you Offer at a price that maximizes your profit. The difference between the buy and sell prices is your profit.

All of this depends on the market. Bid and Offer change every second based on actual supply and demand. Individual and institutional investors determine these. When trading volume increases, spreads narrow; when volume decreases, spreads widen.

For new investors, it’s important to know that some assets, like large-cap stocks, have such high demand that spreads are almost invisible. But small-cap stocks or low-liquidity assets can have spreads that are a noticeable percentage. This must be considered when calculating profit and loss, because sometimes the spread is what eats into our gains.