Crypto Investing #1 – What Is The BID, ASK, BUY, OFFER In Cryptocurrency Trading?

Eric: Hey guys, Eric here. I’ve got Tai Zen over here and I wanted to ask a few questions about trading in the cryptocurrency world. Now… a big point man over here. Now there are a few things that we hear as far as terminology goes in a trading world and also in the Bitcoin world, and you see on the exchanges and I wanted to clarify a few things. Now you here the Bid and the Ask, the Offer, what is the difference between all this terminology that they use in the Buy Box or on the Ticker Tape?

Tai: Okay, so the terms bid, the term ask, and offer, they all mean wanted or for sale. That’s the easiest way to explain it. So for example, if I want to sell this, this Canadian Dry, right here, Canada Dry for…

Eric: Let’s also say I’d like to buy that

Tai: Okay if I want to sell this right, and I offer it to you for a dollar, so I am offering it to you for a dollar, so the offer price is $1. And let’s say that you want to buy it, but you want to buy it for 99 cents.

Eric: So you’re offering a dollar, but if we’re at an auction then I would have to put in my bid for 99 cents, I’ll bid 99 cents and you decide whether you want to sell it or not.

Tai: Yeah, so whenever you put in the price that you want, that bid is called the bid price. So what I’m offering it to you for is called the offer price. Okay, now some people refer to it as the ask, so if I ask you…

Eric: When I first notice it, it was really confusing, now it seems really basic because I can say, ‘Hey what are you asking for that?’

Tai: Yeah so, I am asking $1 for this, right, so the person that is asking is the seller and the person that is bidding, that one is the buyer. And here’s a few tricks that I’ve learned over the years of trading to help the people that I coach in trading. Just remember that the bid starts with the letter B is the same as the letter B in the buyer, so the bidders are the buyers.

Now the people who are offering, right, and asking for their price of $1, there really is no formula to remember that other than the fact that they’re offering it to you, so it’s going to leave them if you buy it, so they must be the ones who are the sellers.

Now the bid and the offer, and the ask, they used to confuse the hell out of me when I first learned how to trade back 7 or 8 years ago, right.

Eric: You’re not alone.

Tai: Yeah, so it confuses everyone when they first learn how to trade, right. And so, the thing that I have learned that will help you guys is just think of… if you go to a newspaper advertisement, there will always the ads section, there will always be people who put up ads that say wanted, the people who want something, they want to buy it, and there’s always the for sale ads, and the people who are advertising to sell it will always be the sellers.

So just remember that the bidders or the bid are the people holding up the wanted side, and the people who are the ask or the offer, they are holding up the for sale side, and if it’s up to me, I would actually change the terminology in trading so that all the bidders, it’ll say wanted and then all the sellers, it’ll say for sale, and that way everybody knows because everybody recognizes that when they read the newspaper.

Eric: Now isn’t it funny how this may be opening up a whole new can of worms, so I’m just going to keep a little comment, you can add if you want.

Tai: Keep it simple man because my brain doesn’t work when it gets complicated.

Eric: Isn’t it funny once you enter into the financial world, all the things that you and I do on daily life have new terminology even though it’s the exact same thing.

Tai: Yeah the purpose of that is the 1% that have all the power and money on Wall Street, they want to confuse the 99% like us on Main Street, the public. That’s the reason why they change the terminology of everything, and they know that most people are lazy, most people don’t want to learn, and most people want to make a fast buck and get rich quick, so they’re never going to take the time to learn what the bid, the ask, the offer, none of that is, right.

Oh, check this out. Here is another trick guy that you guys can use to help you guys understand the difference of who the buyers are whenever you see the prices. The people who are selling will always want to sell for a higher price, so when I sell this soda, I will always want to sell for one dollar or higher

And the person that’s buying, the bidders, they will always want to buy it for a lower price. They never want to buy it for a higher price, so because of that, it’s very easy to remember who the buyers are and who the sellers are when you see the price. So whenever I forget who the buyers and the sellers are on the ticker, on the price charts, I just look at the orders, and I look at which one has a higher price, those are the sellers.

Eric:

Yeah which one gets more expensive as you go down the list and which one gets cheaper as you go down the list, so you’re going to know what side of the list that you’re on based on if you want to buy it, you probably want to buy the cheapest thing that you can, and if you want to sell something, you probably want to get as much money for it as you can.

When you look down that list and you see which one gets more and more expensive, those are the people that have something they want to sell. You look on the other list and you see something that gets cheaper and cheaper, those are the people that want something that wants to buy it for a better price.

Tai:

Exactly, so I hope that helps to clarify what is the bid, the ask and they offer, guys, in layman’s terms. Eric and I are doing everything that we can to beat the system, guys, so that we can take what they’re doing on Wall Street and bring it back to Main Street so that the average Joes, the working-class people, like Eric and myself, and the rest of us on Main Street can learn to intelligently invest our money in the markets, guys.

So thanks for watching this video and if you guys like what we have to share with you guys, make sure that you pause for a moment and hit the subscribe button. That’s really important because that lets Eric and I know if we should continue making these types of videos or not, and give us a thumbs up if you like it, and give us a thumbs down if you don’t like this video.

That way we know to continue making more of these videos or not, okay. And trust me guys, it’s not going to hurt my feelings and it’s not going to hurt Eric’s feelings if you guys don’t hit the thumbs up or the subscribe button, but it does help us know if we should make more of these videos or not, okay.

And if you guys have any friends, family, co-workers or fellow traders or investors that are interested in learning how to trade and invest in Bitcoins and cryptocurrencies, make sure that you guys share this awesome video with them. And as a final, I want to say thanks to my buddy, James D’Angelo from the World Bitcoin Network for providing me with this t-shirt. Alright guys, we’ll catch you guys in the next video.

I think I got you beat. I’m going to name my first son Bitcoin.

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