today we will consider what is a Forex spread how does it work the spread is the difference between the best asking and bidding prices of an asset at a given moment imagine a site with sellers on one side and buyers on the other one seller is ready to sell product for 15 u.s the second one offers to sell at 14 and the selling price offered by a third trader is 13. in turn one buyer is ready to buy product for 10 the second buyer offers nine dollars and the third is willing to pay only eight dollars the best selling price is thirteen and the best buying price is ten therefore three dollars is the spread the following factors affect the size of a spread one asset liquidity the larger the trading volumes the lower the trading costs two volatility when there is an increase in volatility due to an uptick in market conditions a sharp imbalance between bid and ask orders accrues three brokers trade policy brokers have the right to change the amount of their markup four level of business activity for example at night the activity of trading in european currencies decreases and conversely increases in asia five types of account there are brokers with fixed spreads and there are professional ecn accounts with the smallest spreads but each lot will have its own fixed commission the size of a spread does not depend on a trader but there are a few options for reducing it 1. choose accounts with the smallest spread to do this use comparative tables of the independent resources two select the most liquid assets with the highest trading volumes three do not trade when important market news first breaks because that is when the spread is most likely to widen for accounts with the floating spreads 4. use rebate services or spread refunds it's an analog of the classic cashback to learn more about what is a forex spread follow the link under the video and read the information on our web page if you're already on it you'll find a lot of interesting and useful today we will consider what is a forex spread how does it work [Music] the spread is the difference between the best asking and bidding prices of an asset at a given moment imagine a site with sellers on one side and buyers on the other one seller is ready to sell product for 15 u.s the second one offers to sell at 14 and the selling price offered by a third trader is 13. in turn one buyer is ready to buy product for 10 the second buyer offers nine dollars and the third is willing to pay only eight dollars the best selling price is thirteen and the best buying price is ten therefore three dollars is the spread the following factors affect the size of a spread one asset liquidity the larger the trading volumes the lower the trading costs two volatility when there is an increase in volatility due to an uptick in market conditions a sharp imbalance between bid and ask orders accrues three brokers trade policy brokers have the right to change the amount of their markup four level of business activity for example at night the activity of trading in european currencies decreases and conversely increases in asia five types of account there are brokers with fixed spreads and there are professional ecn accounts with the smallest spreads but each lot will have its own fixed commission the size of a spread does not depend on a trader but there are a few options for reducing it 1. choose accounts with the smallest spread to do this use comparative tables of the independent resources two select the most liquid assets with the highest trading volumes three do not trade when important market news first breaks because that is when the spread is most likely to widen for accounts with the floating spreads 4. use rebate services or spread refunds it's an analog of the classic cashback to learn more about what is a Forex spread for more information about this please follow my blog i will soon post more article about spread and more .
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