DitsIntelligence: Latest Global Market News, Forex Market Education

For each currency pair, forex brokers will provide you two separate prices: the bid and ask price.  The " bid " is the price at which the base currency can be SOLD. The " ask " is the price at which the base currency can be purchased. The spread is the difference between these two prices. Also referred to as the " bid/ask spread ."  What is the spread in forex trading ? Brokers who do not charge commissions rely on the spread to make money. This spread represents the cost of enabling instantaneous transactions. This is why " transaction cost " and " bid-ask spread " are interchangeable terminology. The cost of making a trade is included into the buy and sell price of the  currency pair  you want to exchange, rather than being charged separately. This makes sense from a business aspect. The broker provides a service and must earn a profit in some way. They profit by selling the currency to you for a higher price than they purchased for i...