What is spread in forex?

14

MAR,2018

In a Forex Market, Spread is a Technical word, It’s based of the buy and sell price of currency Pair. A spread is simplest way for many Traders or brokers to get compensated for the each transaction the customer makes through their trading platforms. This is called as Spreads.

For Example: Spread being calculated EUR/USD, first of all we will find the buy price at 1.35640 and the subtract the sell price of 1.35626. So broker or trader must be remember that the PIP Value is then identified on the USD /EUR as the 4th digit

What we are left with after this process is a reading of .00014.

The USD would be the base currency and The EUR would be the quote or counter currency, the spread is expressed as pips or points. For example, the spread in the EUR/USD is 2 pips or points.

Simple explanation of Spread is BID and ASKS difference is called Spread.

Its is very important point to know, that spreads are variable meaning they will not always remain the same and will change sporadically,

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