Foreign exchange spread

The spread in foreign exchange trading refers to the difference between the buying price and the selling price, That is, the purchase of currency pairs/Sell price difference. Spread cost "drop" perhaps "Point value" metering, The main cost representing the transaction. Popular currency pairs - For example, major currency pairs, Like the Euro/USD and AUD/dollar - Due to high liquidity, it has a lower spread.

The buying price is something that traders or investors can sell at "Quotation price" (Located on the left side of the quotation) , And the selling price is something that traders or investors can buy "Quotation price" (Located on the right side of the quotation) . We can also think from the perspective of mobile operators: The buying price indicates willingness for the buyer to be ready to accept a selling order at any time (From a trader) , The selling price represents the willingness of the seller to sell to the buyer (Buy orders from traders) . This concept is the foundation of understanding.

If Euro/Purchase of USD currency pairs/The selling price is$1. 1251/$1. 1252, This means you can sell at a higher price$1. 1252 Effectively purchasing 1 Unit in Euros, And at a lower purchase price$1. 1251 sell out. euro (EUR) It is the base currency, dollar (USD) It is the quoted currency (Or pricing currency) .

In the above example, In units of points (The difference between buying price and selling price) do 0. 0001 = (1. 1252 dollar - 1. 1251 dollar) . In this example, Point values are priced to the decimal point 4 position, show 1 Points (If priced to the decimal point 5 position, You will see the following content: 0. 00010 = [1. 12520 dollar - 1. 12510 dollar]) . please remember, One point is "1%" Abbreviations of, equivalent to 1/100 of 1%, It is the smallest integer unit in which a currency pair can fluctuate.

The current buying and selling prices are what traders can immediately or "immediately" Engage with the market (transaction) The price level. The selling price is usually slightly higher than the base market price, And the purchase price is slightly lower than the base market price.

The size of the spread plays a crucial role in forex trading. This is particularly applicable to trading strategies that prefer to conduct a large number of trades in a single trading session. Trading volume, mobility, Market volatility, News and time can both affect spreads. Spread can affect profits, Because when the financial market fluctuates violently, The spread may significantly widen, And cause slippage (Transact at a price different from the requested transaction price) .

Understanding the difference between fixed spreads and floating spreads is crucial. Regardless of market conditions, Fixed spread remains unchanged. And floating spreads constantly change according to market supply, demand, and volatility. Choosing the best spread type is crucial for reducing trading costs. Retail traders with lower trading frequency may benefit from fixed spreads, And those who frequently trade during peak market hours (At this time, the spread is the smallest) Traders may prefer floating spreads. under normal conditions, Floating spreads are lower than fixed spreads, Especially when the market is relatively calm.

use FP Markets Raw Account trading will open the door to ultra-low market spreads for you. Our liquidity comes from some of the largest liquidity suppliers, No additional charges. This allows us to provide you with the lowest spread possible, Especially during periods of market activity, Spread from 0. 0 fire, Previously, only hedge funds could enjoy this.

The spreads of major currency pairs reflect the trading conditions of the market, For example, time, Volatility and liquidity. Due to low liquidity, The spread of secondary currency pairs is larger than that of primary currency pairs. It's interesting that, It is worth pointing out that, have 8 The proportion of major currencies in the foreign exchange market trading volume 85%about.