Hey guys, I just have a newbie question. I've been reading Babypips and other tutorials, but I just want some verification that I understand this right.

My question is about the Bid / Sell order, and if I understand it correctly by illustrating the scenario below:

For example, say you have the currency pair EUR / USD with the bid price of 5. I now exchange 1 EUR for $5, and now have $5. Now the bid price drops to 3. So I exchange $3 to get my 1 EUR back, and keep a profit of $2. Do I understand the bid / sell order correctly? I don't understand why I incur a loss if the Ask price increases, and why I gain a profit if the Bid price decreases