Just realized that the spread is very important for trading, whether trading Forex, stocks, or cryptocurrencies. The spread is the difference between the price at which we sell (Bid) and the price at which we buy (Ask). This is how brokers earn income and the cost we must pay before making a profit.

Imagine selling gold: if we buy gold at $500, we need to sell it at at least $501 to make a profit. That difference is the spread. In Forex trading, such as EUR/USD, if the selling price is 1.05680 and the buying price is 1.05672, the difference is 0.8 pips.

What’s interesting is that the spread tells us how much liquidity the market has. If the spread is 1-2%, it indicates low liquidity. Normal Forex markets usually have a spread of only 0.001%.

Currently, there are two types of spreads to choose from: fixed and variable. Fixed spreads are set in advance and do not change. The advantage is that we can calculate costs accurately. The downside is that Requotes often occur during high volatility, where brokers "block" our system and force us to accept new prices, which are usually worse.

Variable (floating) spreads change according to actual market conditions based on supply and demand. There are no Requotes because brokers do not set them. However, during major news events like NFP releases, spreads can jump from 2 pips to 20 pips instantly, making it difficult for traders and beginners.

The spread value cannot tell us which type is better; it depends on each trader’s style. Small retail traders who trade lightly often benefit more from fixed spreads. Larger traders who trade frequently, especially during peak market times, may find floating spreads more advantageous.

The key tip is that the more the spread fluctuates, the harder it is to profit. Therefore, it’s best to choose brokers with stable spreads and trade popular currency pairs like EUR/USD and GBP/USD, as these usually have lower and more stable spreads.

In summary, if you understand the spread and how it works, you can plan your trading strategies effectively. Forex trading is not gambling; it’s an investment that requires knowledge and understanding. Those who learn the system deeply tend to have a higher chance of success than those who trade randomly.