Hi everyone, I’m practice trading on Oanda fxtrade and always when my limit order gets exercised I’m in the negative profit. For example lets say I place a limit order to execute at 82.22. It hits that price and when I look in my profit area it will says something like -3.28. This price will go up and down as the price moves, but it always starts as negative first. I’m wondering if this is the spread that is added right away before any profit can be made. Hope someone can answer this cause it frustrating.
Thank you ahead of time.
Yes, the difference at the instant you open the trade, before price has even moved, is the spread.
Let’s say you want to buy something and it costs $1.00. You pay the $1 and it is yours. But the shop you bought it from did not pay $1 to put this on their shelves, they maybe paid $0.90. So if you want to immediately sell it back to them, they will only offer you $0.90. Even if the price goes up, there will always be a difference of $0.10 between the buying price and the selling price. That difference is how the shop makes a profit.
Always allow for the spread when you are setting orders. Remember that the spread can widen at the open/close times of the market, during the night and around news announcements. Charts do not show spread: they usually just display the bid price, which is the selling price, the $0.90 price. Sometimes the broker will keep the bid price at $0.90 but move the ask price to $1.20, and this will not show up on the charts: so the charts are just an indication, always check the actual quotes.
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Perfect, I thought it was something like that. Thanks for replying I appreciate it.