Spread

Spread is the difference between the Bid and the Ask price.

It is the fee your financial services provider (broker) will charge on the trade order you are executing in the market.

The spread varies from one instrument to another. For example, on the instrument EURUSD as shown, the spread is 16 points, which is 1.6 pips.

Most traders in the world prefer to trade on low spread instruments. You should learn to filter to select low-spread instruments on your chart.

What types of spreads are in forex?

The type of spreads that you’ll see on a trading platform depends on the forex broker and how they make money.

There are two types of spreads:

1.    Fixed

2.    Variable (also known as “floating”)

The choice between fixed and variable spreads depends on your trading style, risk tolerance, and market experience. It’s crucial to understand the characteristics of each type of spread.