Beware of the Spread explained by professional Forex trading experts the “Beware of the Spread” FX trading team.
Beware of the Spread?
-What Is the Spread?
-Spread Focal Points That FX Traders Should Regard
-How a Wider Spread Can Eat Into Your Account Equity
“Price is what you pay. Value is what you get.”
Warren Buffett.
What Is the Spread?
Forex trading is a very cost-effective market relative to other markets. As a trader in the FX market, your only cost to enter a trade is the spread. The spread is measured in pips and is the difference between the bid and ask of two currencies that are known as the base and counter currency.
If you’re actively trading, you should care very much about how many pips make up the spread on the trade you’re considering. Your concern would focus on the fact that you’ll be paying the spread every time you enter into the trade and the less spread you pay, the quicker your trade will be profitable if the market moves in the direction you anticipated. Please note that you do not pay the spread when exiting the trade.
If you’re unfamiliar with the term pips, there is no need to remain confused. Chances are, you’ve heard the broadcaster on the financial news network mention that the stock market was up or down 100 “points” today or that Oil was down a handful “ticks”. The forex equivalent of points or ticks is pips and for a majority of currencies, the pip is found in the fourth spot past the decimal, but you have paris such as those with the Japanese Yen where the pip is found in the second spot past the decimal.
Beware of the Spread Conclusion
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