Currently, I day trade futures and every now and then, I’ll swing trade spot FX. My main trading instrument is the Euro futures contract, but I’m thinking of switching to day trading the spot FX EUR/USD market, which in a sense, is the same market. I’ve noticed that there’s a 1.5 to 2 pip spread with my broker (TD Ameritrade/ThinkorSwim). I’m wondering how does the spread affect my results?
the spread is very important for daily trading since it will differ a lot if the spread is low because you will get a lower price if the spread is low the definition of spread is the difference between bid and ask so mainly it is the most important thing in trading specially if your scalping it will cost you a lot if the spread is high so look for spreads that range between 0.2 and 0.8 and you will do fine higher than that it will be costly
For day trades, its good to stick to low spreads.
Indices: DAX, CAC, S&P, NSDQ, and not to mention the lowest spread i ever encountered, KOSPI.
Currency pairs: i think $/Yen and EUR/$ and GBP/$
I agree, for day trading, high spread are big bummers! for day trading, scalping , the lower are the spreads the better it is in my opinion
Adversely, and in proportion to the number of trades you do.
For day-trading either spot forex or forex futures, it’s more or less essential (a) to trade where there are much lower spreads than that, and (b) to trade through a genuine broker (i.e. not someone “pretending to be a broker” while actually holding the other side of your positions: it would make little sense to be counterparty trading against someone who holds your funds, determines the prices and makes up all the rules as well! This is kind of “Daytrading 101” and without resolving it, the deck [I]will[/I] be firmly stacked against you. It really [I][U]is[/U][/I] about as simple as that. “Interactive Brokers” is a good place, if that helps.)
Pasting in material unaccredited from the web doesn’t pass as “forum posting”, Simon - and it’s breaching others’ copyrights as well, which hardly helps the forum. :19:
I’m a scalper and the reality is the spread is very much important. Yet, don’t be fooled by brokers who have very low spreads such as .01 - .03 At times having a small spread isn’t always a beneficial thing, because brokers who tend to have low spreads, widen them during “high impact news” which can drain a scalpers account quickly depending on the type of scalping he/she is doing.
So when you look to scalping, and you see a small spread, please make sure to look at the connectivity of that broker. How often does the broker lag you out? How often does the broker widen the spread? Those are two major factors which could spell the end of your trading account.