What is spread?

Spread refers to the commission taken by every broker. We usually go for a low trading spread broker. The difference between ASK and BID is called spread. It represents brokerage service costs and replaces transactions fees. Spread is traditionally denoted in pips – a percentage in point, meaning fourth decimal place in currency quotation. Following types of spreads are used in Forex Trading. As a low spread broker I have selected Trade12 broker from where I have the low spread from 0.1 always help me increase my trading profit. The amount of spread here varies from account to account.

Spread is actually the main profit of a broker for providing us their facilities and services. But we don’t need to think about their profitability. All we should care about getting us the best deals from them. In this market there are two types of spread rate, one is fixed and another is variable. I trade with AAFX and it gives both spread rates. I get 1 pip fixed spread rate on major pairs and variable but low spread rate for common pairs.