Thursday, April 3, 2008

Spread


The current spread for GBP/JPY is 6 pips. But what will happen if I type "204.60" in the "Limit price" window and press "BUY"? I by myself will reduce spread to 4 pips! And there will be the probability of my buy order being executed at 204.60 or better! I can put any price I want, even 204.5850, 204.5810, 204.5801!

So what is the conclusion? There is NO FIXED SPREAD when you trade against other traders! Traders form this spread by themselves! Spread can be 1 pip, 0 pip. Sometimes the spread is negative!

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