Spreads: Difference between the buy and sell prices

The Pipspread

A spread or pipspread is the difference between the bid price and the ask price. Most online forex brokers utilize spread-based trading platforms for individual traders. Look at the spread as the compensation the broker receives for being the market-maker and executing your trade.

Spreads vary from broker to broker and by currency pairs at each broker as well. Generally, the more liquid the currency pair, the narrower the spread; the less liquid the currency pair, the wider the spread. This is especially the case for some of the less-traded crosses.

Traders prefer tight spreads to most of the major currency pairs.

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3. Bid and Ask Price: Determine which is the BUY and SELL price

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