SwingTrader1
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Welcome to part 3 The Spread
The spread is the difference between the bid and ask price.
Fairly simple right? Ok
The bid is the quote a trader gets when they sell a currency pair.
The ask is the quote a trader gets when they buy a currency pair.
A couple of things to remember, the bid is always lower than the ask.
and when a trade is opened, the opening rate will be lower or higher than the rate opened by the amount of the spread. Thats a mouthful.
Here is an example. EUR/USD
I open a trade I buy at 1.2308 the spread I pay for the EUR/USD is 3 pips so I dont break even on my trade until the ask price reaches 1.2311 (3 pips away) from 1.2311 on up its all profit. At least thats what I want.
Selling would be the exact opposite except I would be using the bid quote.
The spread is the difference between the bid and ask price.
Fairly simple right? Ok
The bid is the quote a trader gets when they sell a currency pair.
The ask is the quote a trader gets when they buy a currency pair.
A couple of things to remember, the bid is always lower than the ask.
and when a trade is opened, the opening rate will be lower or higher than the rate opened by the amount of the spread. Thats a mouthful.
Here is an example. EUR/USD
I open a trade I buy at 1.2308 the spread I pay for the EUR/USD is 3 pips so I dont break even on my trade until the ask price reaches 1.2311 (3 pips away) from 1.2311 on up its all profit. At least thats what I want.
Selling would be the exact opposite except I would be using the bid quote.
