Hi All,
I am new to the forex market. Question: do we pay a spread when we enter and exit a trade for the same currency pair? For example, if I were to sell GBP/USD and then buy back GBP/USD, do I pay a spread with each transaction? Thanks.
For a simple explanation, see the section entitled How You Make Money Trading Forex in the preschool section of the babypips school.
Thanks,
I read it , but I am still not clear.
Do I pay 2 spreads? One when I buy and then again when I sell?
lol, okā¦go through the first section of this site ONCE AGAINā¦the answer IS there. If you still look past it, use the search button above and put in āspreadāā¦go through the threads mentioning it and i promise you will see many of them go into as much detail as you like about that subject.
seacrest out
The answer is no. The spread is reflected in your position as soon as you put it on, meaning you are initially in the red by the spread amount because it reflects the price at which you will get out of your trade.
Spreads are nothing but the difference between the Bid price and Ask price. Therefore, if the spread is 0.0 pip the Bid price and Ask price is equal. When the spread is 0.4 pips the difference between Bid and Ask is of $0.0004.
To make it simple yes you do pay the spread for each transaction but as rhodytrader stated it is already factored into the price at the time you chose to buy/sell. Spreads exist for the purpose of your broker has to get paid something for that chart you use and actually putting your trade on the market (if it makes it that far). They are not a not for profit organization. They want to make money your money
You only pay 1 spread for each trade.
Trade #1: Buy EUR/USD = pay spread.
Trade #1: Close the trade = no spread.
Trade #2: Buy EUR/USD = pay spread.
Trade #3: Buy EUR/USD = pay spread.
Trade #4: Sell GBP/JPY = pay spread.
Trade #4: Close the trade = no spread.