Choosing a broker each trader pays attention on spread size, proposed by various companies that trade in the Forex market.
GuruTrade system demonstrates the most accurate data in real time. For each presented type of account all the tics (bid & ask) that form forex brokers’ spread are gathered. Also, the most important indicators, such as available minimum, average, peaks of maximum spread and history of their changes are displayed. These parameters are quite important when choosing a trading account and, respectively, a broker, especially considered that on the websites of brokers they are either obsolete or irrelevant.
The price at which it is possible to purchase currency (Bid), differs from the price at which the same currency is sold (Ask). This difference is the commission, which the broker receives from each transaction, and it is designated by the term “spread”. Getting profit from the spread, the brokerage company in most cases gives the traders opportunity to carry out all transactions without any additional payments.
Change of Spread Size
There are some factors which can affect the spread size. If the market is trading slowly and the traded value is not so large, the spread grows. Respectively, in the case of active trading with a largely traded value of the demand and supply (high liquidity) the spread, on the contrary, tightens. Noticeable political and economic events also have an influence on spread size. When the situation in political and economic life is stable, the spread size is low. At last, but not the least on the importance the place is taken by the volatility of the currency tool. If the current volatility of the currency pair is high, spreads can widen.
The size of a spread is very important trading conditions parameter. Choosing a broker, the traders should pay to this indicator the first-priority attention.