Hi
My name is Daniel and i start trading LIVE month ago. yestrday my trade was closed (EUR/NZD) and i did not know why. my stop was at 1,52122 on my chart candle high price was 1,51781. i called my client and he told to me to switch my chart on ASK. and when i switched the candle high was 1,52130. i asume difference betwen ASK and BID price is spread. how often happen that big spread and why??? is that even normal or should i change my broker???
LP Daniel
Hi Dani1983,
Your broker is right, and the trade was correctly closed out as EUR/NZD has a wide spread. This is because it is a ‘minor/exotic currency cross’ pair, a less traded pair, a less liquid pair and as a result has a wide spread compared to major currency pairs which are traded more, have higher liquidity and as a result have a narrow spread.
The majors are as follow:
EUR/USD (euro/dollar) – "euro"
USD/JPY (U.S. dollar/Japanese yen) – "gopher"
GBP/USD (British pound/dollar) - "cable"
USD/CHF (U.S. dollar/Swiss franc) – “swissie”
Typically, any other combination which also includes USD is classed as a minor, rather than a major.
Your pair, EUR/NZD could be considered as an exotic [B]cross[/B], exotic pairs have wider spreads - here is a definition from Investopedia
Source: Exotic Currency
[I]Exotics are not considered major currencies because they are not easily traded in a standard brokerage account. Major currencies include the U.S. dollar, Euro, Canadian dollar and Swiss franc. Examples of exotic currencies include the Thai baht, Uruguay peso or Iraqi dinari.[/I]