Every market has a spread and so does*forex.*A spread is simply defined as the price difference between where a trader may purchase or sell an underlying asset.*Traders that are familiar with equities will synonymously call this the Bid: Ask spread.
Below we can see an example of the forex spread being calculated for the*EUR/USD. First, we will find the*buy price at 1.13398*and then*subtract*the*sell price of 1.3404. What we are left with after this process is a reading of*.00006. Traders should remember that the*pip value*is then identified on the*EUR/USD*as the 4th digit after the decimal, making the final spread calculated as 0.6 pips
Below we can see an example of the forex spread being calculated for the*EUR/USD. First, we will find the*buy price at 1.13398*and then*subtract*the*sell price of 1.3404. What we are left with after this process is a reading of*.00006. Traders should remember that the*pip value*is then identified on the*EUR/USD*as the 4th digit after the decimal, making the final spread calculated as 0.6 pips
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