FX Bid-Ask Spread: Essential Forex Trading Guide - Parussini & Fils
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FX Bid-Ask Spread: Essential Forex Trading Guide

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FX Bid-Ask Spread FAQs

What is the bid-ask spread in forex?

The bid-ask spread is the difference between the highest price a buyer is willing to pay (bid) and the lowest price a seller is willing to accept (ask) for a currency pair. It represents the trading cost and market liquidity.

How does the bid-ask spread affect forex traders?

A narrower spread means lower trading costs, while a wider spread increases costs. Major currency pairs typically have tighter spreads due to higher liquidity, while exotic pairs often have wider spreads.

Who determines the bid-ask spread in forex markets?

Market makers and liquidity providers set the bid-ask spreads based on market conditions, currency pair volatility, and trading volume. During high volatility or low liquidity, spreads tend to widen.