basic: Bid? Ask? Buy? Sell?

Many beginners like me, always confused about those terms, such as bid price, ask price, buy stop, buy limit, sell stop, sell limit, etc. And also few other terms such as stop loss, take profit, etc.

To put it simple, we can turn on the ask price on our charting tools (usually only bid price are shown). When we buy, we are buying with the Ask Price. When we sell, we sell according to the Bid Price. The difference between ask and bid, is called 'spread'. This is how the brokers earn from us.

To make it simple for everyone, here is one very easy to use illustration. This is very useful for me and I hope it can give you some help too.