š° Spread
š¹ Simple Definition
The spread is the difference between the highest price someone is willing to buy at and the lowest price someone is willing to sell at in the market.
In short: it is the price difference between buying and selling the same currency at the same time.
š¹ Importance of the Spread
Indicator of liquidity:
The smaller the difference, the more liquid the market ā .
A large difference indicates a lack of buyers or sellers ā ļø.
It affects the cost of the transaction:
The larger the spread, the more it costs you to buy or sell the currency šø.
It helps traders make the right decision about the timing of entry and exit ā±ļø.
š¹ Advice for Beginners š”
- Choose currencies or pairs with a small spread to reduce trading costs.
- Monitor the spread before placing any trade, especially in low liquidity markets š§.
