I've just noticed that many people are still confused about the Spread in trading, which is very important if we want to trade wisely.

Simply put, the spread is the difference between the price at which we sell (Bid) and the price at which we buy (Ask) for a currency, asset, or product. It appears in every market, whether Forex, stocks, or even crypto. For example, if EUR/USD is selling at 1.05680 but buying at 1.05672, this difference is the spread. If we buy and close immediately, we will lose 0.8 pips, while the broker makes a profit.

What’s interesting is that the spread also indicates the market’s liquidity. Normal markets have a spread of about 0.001%, but if you see a spread of 1-2%, it shows that the market has very low liquidity.

Currently, there are two options: Fixed Spread and Variable Spread.

Fixed Spread remains constant all the time. The advantage is that we can calculate costs accurately, but the problem is that during extreme market volatility, brokers may Requote prices, which often results in worse prices. This is a big issue when the market moves too quickly.

On the other hand, Variable Spread changes according to market conditions. No Requote is an advantage, but during NFP or major news events, the spread can spike from 2 pips to 20 pips instantly. It’s quick but not suitable for beginners.

Actually, neither is the best; it depends on each trader’s style. Retail traders who prefer small trades should use Fixed Spread more, while those who trade frequently, especially during flash market movements, can benefit more from Variable Spread.

The final tip is to choose a broker with a stable spread that doesn’t fluctuate wildly, and to trade popular currency pairs like EUR/USD and GBP/USD, because these pairs usually have lower spreads, making it easier to profit.