Forex trading education - What is Spread?

Spread is the difference between the buying and sellng price and is the commission which you pay, as currency traders.

For example: if, for instance, you want to convert USD to Euros at the bank, they will tell you that the buying price is 1.56 and that the selling price is 1.49. In other words, in order to buy one Euro you would have to pay a little more than one a half USD. If in that very moment you would want to sell your one Euro to the bank, the bank wukk buy one Euro at a price slightly lower than one and a half USD, so if you sold 1000 USD to the bank you receive 641 Euros. By selling the Euros back you will get only 955 USD.

You pad 1000 USD and received 955 USD, so where are the other 45 USD?

This is the profit of the CHANGE store – this is the commission they charge from their customers.

This is the only commission that you will pay, in the Forex market there are no additional commissions.

Note: it is implied by what is written here that we will always lose in the first second after a trade because of the spread.

Whats next?
What are Pips?
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