I just recently understood this concept well and want to share it with others. Spread is the difference between the selling price (Bid) and the buying price (Ask) of various assets, whether they are currencies, stocks, or digital currencies, and this is the case in all markets.

The importance of the spread lies in how it affects our trading costs. Just imagine if you buy EUR/USD at 1.05680 and close immediately, you would incur a loss of 0.8 pips. That is the portion the broker takes. It's like buying gold at $500 and having to sell it at $501 to avoid a loss. That difference is the spread.

The spread is also a key indicator of market liquidity. In normal forex markets, the spread is about 0.001%, but if you see a spread of 1-2%, it indicates the market is very thin at that moment.

There are two types you need to know: Fixed Spread, which brokers set in advance. The advantage is that you can calculate costs accurately, but the downside is frequent Requotes. When the market is volatile, brokers will "block" the system and ask you to accept a new price, which is often worse.

The other type is Variable Spread, which changes according to market conditions. The advantage is no Requote, and during high liquidity periods, costs are usually lower. But the downside is that it’s harder to speculate, especially during major news releases like NFP, where the spread can jump from 2 pips to 20 pips in an instant.

Between these two types, neither is necessarily better. It depends on each trader’s style. Beginner traders who prefer small trades benefit more from fixed spreads, but active traders who want to avoid Requotes should choose variable spreads.

The tip is to select a broker with spreads that don’t fluctuate too much and focus on trading popular currency pairs like EUR/USD or GBP/USD, because these pairs usually have more stable spreads. The more the spread fluctuates, the harder it is to make profits.

In summary, understanding the spread is a fundamental aspect of forex trading that you must know well because it impacts your costs and your trading capacity. If you choose the type that suits your style, your trading will be more structured and efficient.