I just realized how important the Spread is. If we don’t understand what spread is, it will be difficult to trade effectively.

Spread is the difference between the selling price (Bid) and the buying price (Ask). Whether it’s money, stocks, or digital assets, the principle is the same. In Forex trading, it’s the difference between the Bid and Ask prices of a currency pair. The same applies in the stock market—digital currencies are the same as well.

To put it simply, the spread is the cost we have to pay to the broker. For example, if we buy EUR/USD at 1.05680 and close immediately, the selling price will be 1.05672. This difference of 0.8 pip is the spread we have to pay, and the broker gets profit from that difference. It’s like selling gold: if you buy for $500, you need to sell for at least $501. The $1 difference is the spread.

Spread is also a measure of market liquidity. In normal markets, the spread is usually small—only around 0.001%. But if the spread grows to 1–2%, it means the market lacks liquidity.

There are 2 types of spreads we will encounter: Fixed Spread and Variable Spread (Floating Spread).

Fixed Spread is a spread that stays constant. It’s set by the broker in advance and doesn’t change. The advantage is that we can calculate costs accurately. The disadvantage is that Requotes are often encountered, because when the market is highly volatile, the broker has to adjust the spread quickly. The system will “lock” trading until we accept the new price, which is usually worse than the previous one.

Variable Spread is a spread that changes all the time, rising and falling with market conditions. The broker doesn’t set it; it depends on supply and demand. The advantage is that experienced traders can take advantage of it—especially during periods when the market has high liquidity and there are no Requotes, because the spread naturally moves up and down. The downside is that the spread can suddenly jump significantly, such as when NFP news is released: the spread may surge from 2 pips to 20 pips instantly.

There’s no answer to which one is better. It depends on each person’s trading style. Beginner traders who place small trades often benefit more from Fixed Spread. Large traders who trade frequently and heavily—especially during the Peak of the market—may find Variable Spread more advantageous. If you want to trade quickly or avoid Requotes, you should use Variable Spread.

There’s one rule you need to remember: the more wildly the spread moves up and down, the harder it becomes to make profits. So choose a broker whose spread doesn’t fluctuate much, and trade popular currency pairs such as EUR/USD and GBP/USD, because these pairs usually have lower spreads.

Once you understand spread, trading Forex on Gate will become more systematic, because trading is a financial transaction—not gambling. Everything can be planned, and strategies can be designed. People with deeper knowledge and understanding will have a better chance of success.