## Trading Spread: Why You Need to Know?

The (Spread) is the gap between the selling price (Bid) and the buying price (Ask) of a financial asset, whether it's currency, stocks, or digital currencies. If you want to trade profitably, understanding its mechanics deeply is essential.

## How Much Does It Affect Your Profit?

When you buy an asset at the Ask price and sell immediately, you incur a loss equal to the spread right away. For example, buying EUR/USD at 1.05680 and selling at 1.05672 = losing 0.8 pips instantly.

This difference isn't accidental; it's the broker's revenue and a cost you must pay. Think of it like buying gold $500 and needing to sell at a $501 higher price to break even. That difference $1 is the "spread."

## Why Is Market Liquidity Important?

The gap between Bid and Ask indicates whether the market is recovering or facing issues. Normal currency markets have a small spread of about 0.001%. But if you encounter a market with a spread of 1-2%, it shows low liquidity, making trading more difficult and expensive.

## Fixed Spread (Fixed Spread) vs. Variable Spread (Variable Spread)

### Fixed Spread: Good for planning but risky

Brokers set a fixed spread regardless of market changes. You always know exactly how much you'll pay.

**Advantages:** Precise cost calculation, no surprises.

**Disadvantages:** During high volatility (such as NFP news releases), brokers may "Requote" — close your position and force you to accept a new, worse price, often 20-30 pips higher in an instant.

### Variable Spread (Floating): Flexible but requires caution

The spread fluctuates based on supply and demand signals. You don't get a "fixed price."

**Advantages:** No Requote annoyance. When liquidity is good, spreads are much lower than Fixed Spread, ideal for scalpers and day traders.

**Disadvantages:** Harder to plan. Prices change rapidly, which can trap novice traders. You might intend to buy at 2 pips, but when you press buy, news comes out, and the spread jumps to 20 pips.

## Which Is Better?

There's no absolute answer; it depends on your trading style:

- **Swing traders or beginners:** Choose Fixed Spread for certainty and planning.
- **Scalpers or active traders:** Choose Variable Spread if you're skilled and quick; spreads are much cheaper.
- **Those wanting to avoid Requote:** Variable Spread is the more comfortable option.

## Real Tips to Save Money

1. **Choose popular currency pairs** — EUR/USD, GBP/USD have lower spreads than less traded pairs.
2. **Trade during high liquidity periods** — in the morning (overlap of Asia and Europe), spreads are at their lowest.
3. **Select platforms offering low spreads** — compare actual figures before opening an account.

Spreads may seem like a "hidden" fee, but they impact your profits more than you think. The deeper your understanding, the smarter you trade and the better you avoid being eaten by hidden costs.

Forex trading is not gambling; it's investing. Everything can be planned and strategized. Those who understand spreads and choose systems suitable for themselves will have a higher chance of achieving their financial goals.