What is Forex Spread
Forex Spread in General
Forex quotes are offered with two prices: the Bid and the Ask price. The bid price is the price at which a Forex Broker is willing to buy the base currency in exchange for the counter currency. On the contrary, the ask price is the price at which the Forex Broker is willing to sell the base currency in exchange for the counter currency.
The difference between these two prices is called the Forex Spread and is measured in Pips.
- For example (EUR/USD): Ask Price: 1.3100 | Bid Price: 1.3096
- The spread is 0.0004 or 4 pips
Why Forex Spread is Important?
Low spread in Forex means trading at a low cost. Of course, the trading spread offered by a broker should be regarded according to other important trading parameters such are:
1) The existence or not of trading commissions
2) Possible Re-quotes
The magnitude of spread is very important for day-traders and scalpers and by any other trader executing a large number of trades in a daily basis.
Which Forex Brokers Offer the Lowest Spreads
Usually, ECN Forex Brokers offer the lowest spreads, spreads which are variable.
Using a Trading Rebate to Lower Spread
A Forex Trader can use a Forex Rebate Plan in order to lower his trading cost. A rebate plan may lower your spread and your total cost 30% or more.
► How Trading Rebates work at CurrenciesFx
Which Forex Pairs Provide the Lower Spreads
Popular Forex Pairs are certainly offering the lower spreads. The lowest spreads are found in EUR/USD trading and in GBP/USD trading.
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Read More: » What is a Forex Account | » What are Forex Signals | » What is Forex Scalping
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What is Forex Spread
What is Forex Scalping
What is Forex Scalping in General
Forex Scalping is a trading technique that takes advantage of tiny short-term price changes in currency pairs trading. Forex scalping is based in high capital leverage which may leverage funds up to 1:1000. Scalpers are executing tens or even hundreds of Forex trades on a daily base and usually, they keep their position for less than 1 minute of time.
What are Scalpers
Forex Scalpers are traders who open and close positions in the short-term by taking advantage of tiny upwards movements and actually making a profit by using high leverage. Scalpers target trading profits from 1 to 10 pips. Low spreads and high leverage are absolutely required. Usually, scalpers are after low-spread trading offered by ECN or STP Forex Brokers.
Scalpers are using always Stop-Loss order to limit their loss potential to desirable levels. A successful trader that scalps must have a high winning-to-loose ratio over time.
Forex Brokers Allowing Scalping and Providing a Free VPS Hosting
Scalping is suitable only for Forex Professional Traders and as a practice, it is usually forbidden by Forex brokers in their policy. Here are some Forex Brokers that Allow Scalping and that offer a free VPS Hosting service (VPS means automated trading without your PC turned on):
COMPARE: » Forex Brokers Online | » Forex Bonus
Read More: » What is a Forex Account | » What are Forex Signals | » What is ECN Forex Trading
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