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Spreads - which is the difference between the bid and ask - are of crucial importance


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Spreads - which is the difference between the bid and ask - are of crucial importance for traders and directly affect the profitability of each trade. You should be aware that the differential can vary widely spread throughout the day, turning up a profitable trade into a losing trade.


You should also understand that the spreads will widen mechanically during the closing hours of the market, when volumes are low and liquidity. A similar pattern occurs during the holiday season (see: trader during the holidays). Finally, spreads tend to widen as just before the release of new importances as a monetary policy decision or the publication of the latest unemployment figures. The economic calendar is available to keep you informed of the arrival of such events.






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