## What is the Spread(Spread) Really, and How Does It Affect Trading

When it comes to trading, the spread(Spread) is a fundamental concept that must be understood deeply because it directly impacts our profit and loss. The spread(Spread) is the price gap between the bid price(Bid) offered by sellers and the ask price(Ask) that buyers are willing to pay, representing a hidden fee in every transaction.

Whether trading forex or digital assets, the spread(Spread) plays an important role because it indicates the hidden cost of doing business.

## Where Does the Price Gap(Spread) Come From

In fact, the spread(Spread) is like the profit margin for a trader. When we want to buy a gold bar, the seller might say, "I will buy from you at $500 but sell to you at $501." The difference$1 is the spread(Spread).

In trading financial assets, such as the EUR/USD currency pair, if the platform shows a bid price(Bid) of 1.05672 and an ask price(Ask) of 1.05680, it means that if you buy and sell immediately, you will lose 0.8 pips(, which is the smallest unit of price change). This is the broker's income.

## What Does the Spread(Spread) Indicate

The amount of the spread(Spread) indicates the liquidity(Liquidity) of the market. A highly searched market will have a narrow spread(Spread) because there are many buyers and sellers. Conversely, if the market is quiet, the spread(Spread) widens.

For example, normally, the spread(Spread) of major currencies is about 0.001%. But if you see a spread(Spread) of 1-2%, it indicates high market volatility.

## There Are 2 Types of Spread(Spread): Fixed vs. Variable

### Fixed Spread(

In this case, the broker sets the spread)Spread( in advance and it does not change, regardless of market conditions.

**Advantages:**
- Precise cost calculation because it remains constant all the time.

**Disadvantages:**
- Frequent requotes during volatile markets. The broker may "block" your system and ask you to accept a new price), which is often worse(. This can cause your trading plan to fail.

) Variable/Floating Spread(

Here, the spread)Spread### changes constantly according to market conditions. The broker does not set it; it results from supply and demand in the market.

**Advantages:**
- No requotes because the spread(Spread) varies naturally with the market.
- During high liquidity periods, costs are lower than fixed spreads.

**Disadvantages:**
- During major news events(such as NFP employment data), the spread(Spread) can spike up to 20 pips or more, turning expected profits into losses instantly.
- Not suitable for scalpers due to rapid and large movements.

## Which One Should You Choose?

There is no definitive answer because it depends on each trader's style:

- **Beginner traders or those interested in small-scale trading** → Choose a fixed spread(Spread) for stability in cost calculation.
- **Experienced traders who trade frequently during volatile markets** → Choose a variable spread(Spread) because it may be cheaper.
- **Those who want to avoid requotes** → Opt for a variable spread(Spread).

## Tips for Choosing a Broker

However, one important rule is: **The more the spread(Spread) fluctuates, the harder it is to trade.**

Therefore:
- Choose a broker with a relatively stable spread(Spread).
- Focus on trading popular currency pairs like EUR/USD and GBP/USD, which tend to have narrower spreads(.

## Summary

The spread)Spread( may seem like a minor detail, but it significantly affects your profit and loss. Understanding how the spread)Spread( works is the first step toward disciplined and effective trading. Forex trading is an art and science that can be learned, not gambling. Therefore, those with deep knowledge of trading systems and these factors are more likely to succeed.