After reading, I feel that spreads are something traders need to understand deeply because they directly affect profits and losses.

In short, spreads are the difference between the selling price (Bid) and the buying price (Ask) of any asset, whether it's currency, stocks, or digital currencies. When trading forex, spreads are the difference between the bid and ask of a currency pair. Similarly, in the stock market, spreads are the difference between the buy and sell prices. For example, if we buy EUR/USD at 1.05680 but have to sell at 1.05672, it means if we close immediately, we lose 0.8 pips. This is the spread that brokers charge as a fee.

What you need to know is that spreads are also an indicator of market liquidity. If spreads are narrow (around 0.001%), it indicates a highly liquid market. But if spreads widen to 1-2%, it suggests a less active market with fewer buyers and sellers.

When talking about spreads, we must mention two types: fixed spread and variable spread. Fixed spread is set by the broker at a constant rate that doesn't change. The advantage is that we can calculate costs accurately. The disadvantage is that when the market moves quickly, brokers often requote, which can be very annoying during fast trading.

On the other hand, variable spread (or floating spread) fluctuates according to actual market conditions. The advantage is that for active traders, spreads are usually lower, and there are no requotes. The downside is that during major news releases, spreads can spike dramatically. For example, when an NFP report is released, spreads might jump from 2 pips to 20 pips in an instant.

The question is, which is better? It depends on our trading style. Beginner traders or small traders who prefer to trade less often tend to benefit more from fixed spreads. But active traders, especially during volatile market times, will find variable spreads more advantageous.

Most importantly, spreads are a variable that must be controlled. Choose brokers with low and stable spreads, and trade major currency pairs like EUR/USD or GBP/USD that don't have large fluctuations in spreads. If you understand spreads deeply, your trading plans and efficiency will truly improve.