Hi all … I´m studing and testing forex since a couple of months …
I´m on demo standard account on IcM and making some testing with standard lots max. leverage. Analizing my first trades I observed something that is still not clear to me.
Broker says in their standard account they profit from spread, adding 1 pip.
I did a buy trade on Eurusd, 4 lots, at 1.16828 and closed it at 1.6839 with a profit of 44$ … I understand that this is 1.1 pip. This was the information that I got from my history trades.
My question refers at where is the 1 pip profit for the broker ?
The spread of 1 pip is the difference between the price you pay to “buy” to enter a long position (the “ask” price) and the price you pay to “sell”, to close the long position (the “bid” price).
With a 1 pip spread, when you bought at 1.16828 ask, the bid would have been 1.16818, so the bid has had to rise 2.1 pips so you could close where you did. Be aware that charts normally show only bid prices.
That’s correct. The record will only show the price at which your trade was opened or closed.
Note that before and after news announcements / events, when markets at home and overseas are opening / closing, spreads can go out to many times the normal pips - maybe 10 times, maybe more. The only way to be sure of the drift in spreads through a normal day and around news is to watch the quotes (though I think some software will let your chart display both bid and ask).