What is Spread in Forex A Beginner Guide

What is Spread in Forex A Beginner Guide

What is Spread in Forex A Beginner Guide If you are new to Forex trading, one of the most important terms you need to understand is the spread . Many beginners focus only on buying and selling, but they often forget that every trade has a cost. In Forex trading, one of the most common trading costs is called the spread . In simple words, the spread in Forex is the difference between the buy price (ask price) and the sell price (bid price) of a currency pair. This small price difference is how many brokers make money when traders open and close positions. For example, if the EUR/USD currency pair shows a buy price of 1.1002 and a sell price of 1.1000 , the difference between these two prices is 2 pips . That difference is called the Forex spread. What Does Spread Mean in Simple Words In simple English, spread is the small gap between the price at which you can buy a currency pair and the price at which you can sell it at the same moment. It is one of the first costs you pay when you enter a For…