In forex trading, the spread is one of the most important concepts a trader must understand, because it represents the basic cost of opening every position. The spread in trading refers to the difference between the bid price and the ask price of a currency pair, and this cost directly affects profitability across all trading strategies. In simple terms, the spread is how brokers structure pricing, how liquidity is reflected in the market, and how trading conditions shift throughout the day.
Understanding the spread matters because it influences trade execution, affects short-term trading performance, and determines how much the market must move before a position turns profitable. The core principle is that tighter spreads generally reduce trading costs, while wider spreads increase them-especially during volatile or low-liquidity conditions.
This article will explain the principles behind forex spreads, how they are calculated, why they fluctuate, and the factors that influence them. By the end, traders will understand how spreads work in practice and how to make better trading decisions as a result.
What Is the Spread in Forex?
The spread in forex is the difference between the bid price and the ask price of a currency pair. In forex trading, the term “spread” refers to the basic cost you pay to open a position, and it represents the gap between what buyers are willing to pay (bid) and what sellers are willing to accept (ask). The bid/ask spread is one of the most important pricing elements in the forex market because it determines how much the market must move before a trade becomes profitable.
Pips are the standard unit used to measure spreads in forex. To put it simply, the spread expressed in pips is calculated as ask – bid, and this value determines the trading cost for entering or exiting a position. The key reason spreads fluctuate is that market liquidity and volatility constantly change, affecting how tightly prices can be quoted by brokers and liquidity providers.
Key points:
The spread measures the difference between bid and ask prices.
A forex spread is measured in pips, the smallest unit of price movement.
A narrow (tight) spread means lower trading costs, a wider spread means higher costs.
Spreads vary due to liquidity, volatility, and market conditions.
The bid/ask spread reflects real-time market activity and pricing efficiency.
As a result, understanding the spread gives traders a clearer picture of transaction costs and how price movements affect trade outcomes.
How to Calculate the Spread in Forex
In forex trading, calculating the spread means finding the pip difference between the bid price and the ask price. The core principle is simple: the spread shows the trading cost, and it is obtained by subtracting the bid from the ask. In practice, traders use this calculation to understand whether a spread is low, medium, or high, which directly affects trade profitability.
Formula:Spread = Ask Price – Bid Price
Example:If EUR/USD is quoted at 1.0850 (bid) and 1.0852 (ask), then:1.0852 – 1.0850 = 0.0002 = 2 pipsThis means the spread on EUR/USD is 2 pips.
In simple terms, pips are the unit used to measure the spread. A low spread often appears in highly liquid currency pairs, while a higher spread usually occurs in volatile or low-liquidity conditions. For example, major pairs like EUR/USD typically have lower spreads, while exotic pairs see much wider spreads.
Spread Levels and Their Meaning
Spread Level
Pip Value
Meaning
Low Spread
1–2 pips
Indicates high liquidity and lower trading costs.
Medium Spread
3–5 pips
Market is moderately liquid; trading costs are average.
High Spread
6+ pips
Conditions are volatile or liquidity is low, increasing trading costs.
Typical Spread Ranges in Different Conditions
Spread Level
Typical Pip Range
Market Conditions
Common Currency Pairs
Trading Impact
Low Spread
1–2 pips
High liquidity, stable sessions
EUR/USD, GBP/USD, USD/JPY
Lower costs, ideal for active traders
Medium Spread
3–5 pips
Moderate liquidity or mild volatility
Minor pairs (e.g., EUR/GBP, AUD/JPY)
Acceptable costs, manageable for most strategies
High Spread
6+ pips
Low liquidity or high volatility
Exotic pairs (e.g., USD/TRY, USD/ZAR)
Higher costs, harder for short-term strategies
A clear understanding of spread calculation helps traders evaluate trade timing, cost efficiency, and overall market conditions. This is why accurate calculation is an essential part of forex trading.
Understanding Forex Spread Quotes
A forex spread quote shows the bid price and ask price of a currency pair, and the spread is the numerical difference between them, measured in pips. In forex trading, this structure matters because the bid–ask spread represents the actual cost a trader pays when opening or closing a position.
Understanding how these prices appear in a quote helps traders interpret market conditions and evaluate execution quality.
Most forex brokers present bid and ask prices in a dual-quote format or in a simple pricing table.
Below is an example of a typical quote:
Bid
Ask
1.1200
1.1250
Sell
Buy
What the Bid and Ask Mean
Bid Price: The price at which the broker is willing to buy from you (the price you sell at).
Ask Price: The price at which the broker is willing to sell to you (the price you buy at).
Examples of Real Spread Quotes
EUR/USD = 1.1050 / 1.1052 → Spread = 2 pips
USD/JPY = 150.321 / 150.329 → Spread = 0.8 pip
Here’s how it works:
When you buy, you pay the ask price.
When you sell, you receive the bid price.
The spread reflects the difference between these prices and forms the immediate trading cost.
Spreads also change depending on market conditions.
High liquidity sessions (London or London–New York overlap): spreads typically narrow.
Low liquidity sessions (late Asian session) or during major news events: spreads often widen.
As a result, understanding spread quotes helps traders assess market quality, choose the right trading times, and manage transaction costs more effectively.
What Types of Spreads Exist?
In forex trading, the type of spread you see on a trading platform depends on how the broker generates revenue and how prices are sourced. In simple terms, spreads can be fixed, variable, ultra-low variable, or raw, and each type reflects a different pricing model and trading environment. Understanding these spread types helps traders choose the account structure that best fits their strategy.
Most brokers operate under three main models-Market Maker, STP, and ECN-and each model offers different spread conditions. Market Makers typically provide fixed spreads, while STP and ECN brokers offer floating or raw spreads that adjust with real-time market liquidity and volatility.
Broker Model Comparison Table
Broker Model
Spread Type Provided
Feature
Market Maker
Fixed Spread
Predictable, controlled pricing set internally.
STP
Floating Spread
Prices come directly from liquidity providers; spreads fluctuate.
ECN
Raw / Ultra-Low Variable Spread
Tightest spreads from LPs, commission charged separately.
Four Main Types of Forex Spreads
Fixed Spreads
Fixed spreads are spreads that remain constant under most market conditions. The broker keeps the bid–ask difference unchanged, allowing traders to know their costs in advance.
Variable Spreads
Variable (floating) spreads change continuously based on liquidity and volatility. They may be very tight during active sessions but widen during news events or quiet periods.
Ultra–Low Variable Spreads
Ultra-low spreads are a type of floating spread found mainly in ECN accounts, where quotes from multiple liquidity providers compress spreads to near-zero levels. A commission fee is charged instead.
Raw Spreads
Raw spreads are sourced directly from liquidity providers without broker markup. These spreads can be as low as 0.0 pip, with commissions applied separately.
Each spread type works differently in practice, and understanding these differences helps traders choose the most suitable account for their trading style.
What Are Fixed Spreads in Forex?
Fixed spreads in forex are spreads that remain constant under most market conditions, meaning the bid–ask difference does not change even when market volatility increases. In simple terms, fixed spreads offer stable pricing because the broker sets the spread internally rather than sourcing it directly from external liquidity providers. Having stability allows traders to know their transaction costs in advance, which is why fixed spreads are often preferred by beginners.
Fixed spreads are typically offered by Market Maker brokers. Because they control their own pricing, they can keep spreads stable during normal conditions. However, during extreme volatility-such as FOMC meetings, CPI reports, or Non-Farm Payroll releases-fixed-spread brokers may temporarily widen their spreads or pause quoting to manage risk.
Advantages of Fixed Spreads
1.Predictability：Fixed spreads make trading costs predictable because the bid–ask difference does not fluctuate with market conditions. This is helpful for planning risk and calculating trade costs accurately.
2.Ideal for Beginners：New traders often prefer fixed spreads because they create a more stable learning environment, with fewer surprises during execution.
3.Consistent Cost Management：Since spreads remain stable, traders can better manage their overall cost structure and estimate break-even levels with more confidence.
Disadvantages of Fixed Spreads
1.Higher Overall Cost:Fixed spreads are usually wider than low-floating spreads offered by STP or ECN brokers, which can increase long-term transaction costs.
2.Less Reflection of Market Reality:Because prices are set internally by the broker, fixed spreads may not reflect real-time interbank liquidity conditions.
3.Limited Broker Options:Fewer brokers offer fixed spreads today, as most platforms have transitioned to variable pricing models.
Fixed spreads can be a practical option for traders who value cost stability, but they may not be optimal for strategies requiring the tightest spreads.
What Are Variable Spreads in Forex?
Variable spreads in forex are spreads that change continuously based on market conditions. In simple terms, a floating spread widens or narrows depending on liquidity and volatility, meaning the bid–ask difference is never fixed. This type of spread reflects real-time market pricing and can fluctuate significantly during different trading sessions or major economic events.
Floating spreads are primarily offered by STP and ECN brokers because their prices come directly from liquidity providers. During high-liquidity periods-for example, EUR/USD in the London session-the spread may fall to 0.1–0.5 pips. However, during major news releases or periods of market stress, the spread can widen sharply to 5–10 pips or more.
Floating spreads are influenced by:
Market liquidity: Higher liquidity → tighter spreads
Volatility: High volatility → wider spreads
Trading sessions: London/New York sessions typically offer the lowest spreads
While floating spreads may reduce costs when liquidity is strong, they are not always cheaper. During low-liquidity hours or volatile conditions, they can widen dramatically, making trading more expensive and less predictable.
Advantages of Variable Spreads
1.Market-Reflective Pricing：Variable spreads better reflect real market conditions because they change based on liquidity and volatility.
2.More Competitive Pricing：During active sessions, floating spreads can be extremely tight, reducing overall trading costs.
3.Closer to Interbank Rates：ECN/STP pricing often mirrors the raw prices seen in institutional trading environments
Disadvantages of Variable Spreads
1.Unpredictable Costs：Because spreads fluctuate, traders may face higher-than-expected costs during volatile periods.
2.Increased Trading Complexity：Short-term strategies must account for sudden spread widening, especially around news releases.
3.Risk During High Volatility：Spreads can widen rapidly during economic announcements, affecting stop-loss placement and execution.Variable spreads are ideal for traders who want access to more realistic market pricing but are comfortable managing fluctuating costs.
What Are Ultra–Low Variable Spreads?
Ultra–low variable spreads are a specific type of floating spread characterized by extremely tight pricing-often between 0.0 and 0.3 pips during high-liquidity periods.
In forex trading, the term “ultra–low variable spreads” refers to spreads delivered directly from multiple liquidity providers without any broker markup added. These spreads are typically available on ECN accounts, where brokers charge a separate commission instead of widening the spread.
The key reason ultra–low spreads can exist is the deep liquidity aggregated from banks, prime brokers, and institutional liquidity pools. Because multiple liquidity providers compete to offer the best bid and ask prices, the bid–ask difference can shrink to near-zero in highly active sessions. However, spreads still fluctuate; they may widen to 5–10 pips during volatile conditions or major economic announcements.
Ultra–low variable spreads are especially suitable for:
Scalpers
Algorithmic / EA traders
High-frequency traders
Day traders
News traders who require fast execution and minimal spread costs
This type of spread provides traders with access to the most competitive pricing available in retail forex trading.
Advantages of Ultra–Low Variable spreads
1.Lowest Trading Costs:Because spreads can reach 0.0 pips, overall transaction costs are significantly reduced, especially for high-volume traders.
2.No Markup From the Broker:The broker does not add any additional spread; instead, a transparent commission fee is charged.
3.Perfect for Precision-Based Strategies:Scalping, EA systems, and algorithmic strategies benefit from ultra-tight spreads and faster execution.
4.Closer to True Market Depth:Pricing reflects genuine interbank liquidity with fewer requotes and more stable fills.
Disadvantages of Ultra–Low Variable Spreads
1.Commission Fees Apply:Because spreads are not marked up, brokers charge per-lot commissions, increasing the cost per trade for low-frequency traders.
2.Spreads Still Widen During Volatility:Even ultra–low pricing cannot prevent spread spikes during major news events or low-liquidity periods.
3.Beginners May Misinterpret “0.0 Pips”:Zero spreads do not mean “free trading”; costs still exist due to commissions and variable execution.
4.Higher Minimum Deposit Requirements:ECN accounts often require larger starting balances and more stringent trading conditions.Ultra–low variable spreads offer unmatched cost efficiency but require traders to understand commission-based pricing and volatility-related spread changes.
What Are Raw Spreads?
Raw spreads in forex are the pure, unmarked bid and ask prices streamed directly from liquidity providers. In simple terms, “raw spreads” refer to pricing without any broker markup added, meaning the spread can be as low as 0.0 pip during periods of high liquidity. This type of pricing is commonly offered on ECN or high-tier STP accounts where the broker earns revenue through a separate commission rather than widening the spread.
Raw pricing comes from multiple liquidity sources, such as banks, ECN prime brokers, and institutional liquidity pools. Because these providers compete to quote the best bid and ask prices, traders often receive extremely tight spreads that closely reflect real market depth. However, the spread still fluctuates with liquidity conditions and may widen during news events or thin trading hours.
Raw spreads are typically preferred by:
Scalpers
High-frequency traders
Algorithmic / EA traders
Active day traders
High-volume traders
This structure offers transparency and cost efficiency for traders who rely on tight execution and precise pricing.
Advantages of Raw Spreads
1.Ultra-Tight Spreads:Raw spreads can reach 0.0 pips, significantly reducing trading costs for active traders.
2.Tranclass="list"sparent Pricing:The broker does not alter the spread; all markups are removed for maximum price clarity.
3.Lower Overall Cost for Active Traders:Even after commissions, raw pricing is often cheaper than standard spread-only accounts.
4.Ideal for High-Frequency and Algorithmic Strategies:EA systems, scalping setups, and low-latency strategies perform better with minimal spreads.
5.Better for News Trading:During news spikes, raw pricing may still offer tighter spreads compared to traditional models.
Disadvantages of Raw Spreads
1.Commission Fees Are Mandatory:ECN accounts charge a per-lot commission, increasing the cost per trade for low-volume traders.
2.More Spread Volatility:Because pricing comes directly from liquidity providers, spreads may fluctuate more aggressively during thin liquidity.
3.Higher Minimum Capital Requirements:Raw spread accounts often require larger deposits and are tailored to more experienced traders.
4.Not Ideal for Beginners:Understanding cost structures and volatile spread behaviour can be challenging for new traders.
5.Execution Quality Depends on LP Network:The performance of raw spreads relies heavily on the broker’s liquidity provider mix and routing technology.Raw spreads provide the most transparent and competitive pricing in the market, but they suit traders who understand commissions, volatility, and advanced execution conditions.
Forex Spread Types Compared
The forex market offers several types of spreads, and each works differently depending on broker model, liquidity conditions, and trading strategy. In simple terms, spreads can be fixed, variable, ultra–low variable, or raw, and understanding these differences helps traders choose the most cost-efficient account type for their trading style.
The comparison below summarises how each spread type functions, its advantages, disadvantages, and who it is best suited for.
Comparison Table: Types of Forex Spreads
Spread Type
Definition
Typical Spread Range
Advantages
Disadvantages
Best For
Fixed Spreads
A spread that remains constant regardless of market volatility. Broker sets a fixed bid–ask difference.
Usually 1.5–3.0 pips on major pairs
Predictable costs; stable pricing; ideal for beginners
Higher cost than raw/ECN; may widen during extreme volatility; not market-reflective
Beginners; low-frequency traders; those needing stable pricing
Variable Spreads
A floating spread that changes with liquidity and volatility.
Tight in liquid markets (0.1–1.0 pips), wider in volatility (5+ pips)
Reflect real market conditions; competitive pricing during active sessions
Costs unpredictable; may widen sharply during news; more complex to manage
Day traders; swing traders; traders active during liquid sessions
Ultra–Low Variable Spreads
A form of floating spread with near-zero pricing sourced from multiple LPs; commission charged separately.
0.0–0.3 pips in liquid periods; 5–10 pips in volatility
Lowest trading costs; no broker markup; ideal for precision strategies
Commission fees; spreads still widen; higher deposits required
Scalpers; EA/algorithmic traders; high-frequency traders
Raw Spreads
True interbank prices with zero markup from the broker; commission charged.
0.0–0.2 pips under normal liquidity
Transparent pricing; lowest overall cost for active traders; ideal for advanced strategies
Commission mandatory; volatile spreads; requires experience
High-volume traders; news traders; ECN users; algorithmic systems
This comparison helps traders quickly identify which spread model aligns with their strategy and risk tolerance. As a result, choosing the right spread type can significantly improve execution, lower costs, and enhance long-term trading performance.
Why Does the Spread Change in Forex?
In forex trading, the spread changes because the bid and ask prices constantly move with market conditions. The key reason is that liquidity and volatility are never static, so the difference between the bid and ask widens or narrows based on how actively the market is trading.
When liquidity is high, spreads tend to tighten. When volatility increases or liquidity drops, spreads typically widen.
Several major factors influence spread changes, including trading sessions, volatility, overall market liquidity, news events, currency pair type, and broker model. Understanding these factors helps traders anticipate when spreads are likely to rise or fall, improving trade timing and cost management.
Trading Sessions
Different forex sessions create different liquidity conditions, which directly affect spreads. The core principle is higher liquidity → tighter spreads, while lower liquidity → wider spreads.
Trading Session Spread Characteristics
Trading Session
Liquidity Level
Spread Behaviour
Asian Session
Low–Medium
Spreads tend to be wider due to slower market activity.
European Session (London)
High
Spreads usually tighten as liquidity increases.
U.S. Session (New York)
High
Tight spreads, especially during active market hours.
London–New York Overlap
Very High
Tightest spreads of the day; highest trading volume.
Session Opens
Volatile
Spreads may widen temporarily due to sudden price adjustments.
Session Closes
Lower liquidity
Spreads widen as trading volume drops.
After-hours / Late-night periods
Very Low
Spreads often widen significantly.
The session you trade in can impact your trading costs, which is why many traders prefer the London or London–New York overlap.
Read more：Best time to trade forex: When to enter the market during the day
Market Volatility
Higher market volatility usually causes spreads to widen. When prices move rapidly, liquidity providers adjust their quotes to manage risk, leading to unstable or temporarily expanded spreads.Examples include:
CPI or NFP releases
Major geopolitical news
Sudden market shocks
As a result, volatility increases trading costs and makes short-term strategies harder to execute.
Market Liquidity
Market liquidity refers to how easily trades can be executed without affecting price.
High liquidity: Many buyers and sellers → tighter spreads
Low liquidity: Fewer participants → wider spreads
Liquidity comes from major institutions, liquidity providers (LPs), and overall market participation. When liquidity thins, spreads widen to reflect increased risk.
News Events
Major news releases often cause spreads to widen sharply. High-impact events create uncertainty, causing liquidity providers to reduce exposure, resulting in wider bid–ask differences.
Common widening events:
NFP(Non-Farm Payrolls)
CPI (inflation data)
GDP releases
FOMC meetings
Unexpected geopolitical announcements
During these events, spreads may widen by several pips-even on major pairs.
Read more:FOREX NEWS
Currency Pair Type
Different currency pairs naturally have different spread ranges.
Major pairs (EUR/USD, GBP/USD, USD/JPY): High liquidity → low spreads
Minor pairs (EUR/GBP, AUD/NZD): Moderate liquidity → medium spreads
Exotic pairs (USD/TRY, USD/ZAR): Low liquidity → high spreads
The lower the trading volume, the wider the typical spread will be.
Broker Type
Broker models also influence how spreads behave.
Market Makers: Can keep spreads fixed or slightly adjusted
STP Brokers: Spreads fluctuate based on liquidity provider pricing
ECN Brokers: Very tight spreads but highly sensitive to liquidity changes
Brokers may widen spreads during extreme volatility to protect against slippage and execution risks.
Forex Spread Trading Strategies
Forex spread trading strategies focus on using spread behaviour-tightening or widening-to reduce trading costs or improve trade timing. In simple terms, these strategies help traders choose when to trade, which pairs to trade, and how to adapt their approach based on spread conditions. Understanding these methods can improve profitability and reduce unnecessary trading costs.
Below are the four key spread-based trading strategies.
Low Spread Currency Pairs Strategy
The low spread currency pairs strategy focuses on trading major pairs that naturally have tight spreads, such as EUR/USD, GBP/USD, and USD/JPY. The core principle is that lower spreads reduce overall trading costs, making this approach ideal for active traders who enter the market frequently.
This strategy works because major pairs have strong liquidity, especially during the London and New York sessions. However, traders should be aware that spreads may still widen during news events or low-liquidity periods.
Best suited for:
Day traders
Scalpers
Traders who trade during major sessions
Key benefits:
Lower transaction costs
Faster break-even points
High liquidity and smoother execution
Time-Based Spread Trading
Time-based spread trading focuses on entering trades during periods when spreads are naturally at their lowest-typically during the London session or the London–New York overlap. In simple terms, the strategy is built around trading when the market is most liquid.
This strategy works because spreads tighten when institutional participants are most active. However, spreads may widen briefly at session opens due to sudden price adjustments.
Best suited for:
Intraday traders
High-frequency traders
Traders who want predictable cost conditions
Key benefits:
Consistently tighter spreads
Reduced slippage
Improved execution quality
Scalping with Tight Spreads
Scalping with tight spreads is a strategy where traders make many small trades aiming for small price movements. Because scalpers open dozens or sometimes hundreds of trades in a session, spread size becomes one of the most important factors.
This strategy works best with ECN accounts, where spreads can be near zero, but a commission applies. Traders must also consider spread widening during news releases, as scalping requires extremely stable and low-cost conditions.
Best suited for:
Scalpers
Algorithmic traders
High-frequency traders
Key benefits:
Maximum cost efficiency
Ultra-tight spreads increase profitability potential
Ideal for automated strategies
News Avoidance Strategy
The news avoidance strategy focuses on avoiding trades shortly before and after high-impact economic events. In simple terms, traders stay out of the market when spreads are likely to widen dramatically.
This strategy works because spreads often spike during releases such as NFP, CPI, FOMC, and major geopolitical headlines. Avoiding these moments protects traders from unexpected costs and slippage.
Best suited for:
Swing traders
Beginners
Traders who prefer stable trading conditions
Key benefits:
Reduced volatility risk
Better control over execution
Avoidance of sudden spread spikes
Read more：15 Best Trading Strategies Recommended by Top Traders
FAQ
What is a good spread in forex?
A good spread in forex is typically 1–2 pips for major currency pairs during high-liquidity sessions. Lower spreads indicate better trading conditions, while wider spreads suggest higher volatility or reduced liquidity.
Is a higher or lower spread better?
A lower spread is better because it reduces trading costs and requires a smaller price movement to reach break-even. A higher spread increases costs and usually signals low liquidity or high volatility.
How much is 1 spread in forex?
A spread is measured in pips, with most major pairs using 0.0001 as one pip. For example, a 2-pip spread on EUR/USD might appear as 1.1051 / 1.1053.
What affects forex spreads?
Forex spreads are affected by liquidity, volatility, trading sessions, broker model, and economic or geopolitical events. High-impact news and low-liquidity periods usually cause spreads to widen.
What is the bid-ask spread?
The bid-ask spread is the difference between the bid price (selling price) and the ask price (buying price) of a currency pair. It represents the immediate cost traders pay when opening a position.
How do spreads affect forex profits?
Spreads directly reduce potential profits because they act as an initial cost. A trade must move beyond the spread in your favour before becoming profitable. Wider spreads require larger market moves, increasing difficulty for short-term strategies.
Final Thoughts
In simple terms understanding the spread in forex is essential for every trader because it represents the fundamental cost of entering the market.
The spread reflects the difference between the bid and ask prices, showing how liquidity, volatility, and market conditions shape trading costs in real time. To put it simply: tight spreads reduce costs and improve efficiency, while wider spreads increase the amount the market must move before a trade becomes profitable.
Throughout this guide, I have covered how spreads are calculated, how spread quotes work, why spreads change, and the different types of spreads offered by brokers. Together, we have also explored practical trading strategies built around spread behaviour, helping traders minimise unnecessary costs and choose optimal trading times.
By understanding how spreads work in practice, traders can make better decisions, improve trade timing, and enhance overall profitability. The spread is not just a small number on a price chart-it’s a key component that shapes your trading edge.
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},
{
"@type": "Question",
"name": "What is the bid-ask spread?",
"acceptedAnswer": {
"@type": "Answer",
"text": "The bid-ask spread is the difference between the bid price (selling price) and the ask price (buying price) of a currency pair. It represents the immediate cost traders pay when opening a position."
}
},
{
"@type": "Question",
"name": "How do spreads affect forex profits?",
"acceptedAnswer": {
"@type": "Answer",
"text": "Spreads directly reduce potential profits because they act as an initial cost. A trade must move beyond the spread in your favour before becoming profitable. Wider spreads require larger market moves, increasing difficulty for short-term strategies."
}
}
]
},
{
"@type": "Dataset",
"@id": "https://www.radexmarkets.com/en/News/NewsDetail?p=bnNuT2ZidUNvQlk9#spread-levels",
"name": "Spread Levels and Their Meaning",
"description": "This table categorizes spread levels (Low, Medium, High) by their pip value and explains what each level indicates regarding market liquidity and trading costs.",
"columns": [
"Spread Level",
"Pip Value",
"Meaning"
],
"data": [
{
"Spread Level": "Low Spread",
"Pip Value": "1–2 pips",
"Meaning": "Indicates high liquidity and lower trading costs."
},
{
"Spread Level": "Medium Spread",
"Pip Value": "3–5 pips",
"Meaning": "Market is moderately liquid; trading costs are average."
},
{
"Spread Level": "High Spread",
"Pip Value": "6+ pips",
"Meaning": "Conditions are volatile or liquidity is low, increasing trading costs."
}
]
},
{
"@type": "Dataset",
"@id": "https://www.radexmarkets.com/en/News/NewsDetail?p=bnNuT2ZidUNvQlk9#broker-model",
"name": "Broker Models and Spread Types Provided",
"description": "This table outlines the relationship between Broker Models (Market Maker, STP, ECN) and the specific Spread Types they provide, along with key features of each model.",
"columns": [
"Broker Model",
"Spread Type Provided",
"Feature"
],
"data": [
{
"Broker Model": "Market Maker",
"Spread Type Provided": "Fixed Spread",
"Feature": "Predictable, controlled pricing set internally."
},
{
"Broker Model": "STP",
"Spread Type Provided": "Floating Spread",
"Feature": "Prices come directly from liquidity providers; spreads fluctuate."
},
{
"Broker Model": "ECN",
"Spread Type Provided": "Raw / Ultra-Low Variable Spread",
"Feature": "Tightest spreads from LPs, commission charged separately."
}
]
},
{
"@type": "Dataset",
"@id": "https://www.radexmarkets.com/en/News/NewsDetail?p=bnNuT2ZidUNvQlk9#typical-spread",
"name": "Typical Spread Ranges in Different Market Conditions",
"description": "This dataset details typical pip ranges across different spread levels, linking them to specific market conditions, common currency pairs affected, and the resulting impact on trading.",
"columns": [
"Spread Level",
"Typical Pip Range",
"Market Conditions",
"Common Currency Pairs",
"Trading Impact"
],
"data": [
{
"Spread Level": "Low Spread",
"Typical Pip Range": "1–2 pips",
"Market Conditions": "High liquidity, stable sessions",
"Common Currency Pairs": "EUR/USD, GBP/USD, USD/JPY",
"Trading Impact": "Lower costs, ideal for active traders"
},
{
"Spread Level": "Medium Spread",
"Typical Pip Range": "3–5 pips",
"Market Conditions": "Moderate liquidity or mild volatility",
"Common Currency Pairs": "Minor pairs (e.g., EUR/GBP, AUD/JPY)",
"Trading Impact": "Acceptable costs, manageable for most strategies"
},
{
"Spread Level": "High Spread",
"Typical Pip Range": "6+ pips",
"Market Conditions": "Low liquidity or high volatility",
"Common Currency Pairs": "Exotic pairs (e.g., USD/TRY, USD/ZAR)",
"Trading Impact": "Higher costs, harder for short-term strategies"
}
]
},
{
"@type": "Dataset",
"@id": "https://www.radexmarkets.com/en/News/NewsDetail?p=bnNuT2ZidUNvQlk9#spread-types-comparison",
"name": "Comparison of Forex Spread Types",
"description": "A comprehensive comparison of different spread types (Fixed, Variable, Ultra-Low, Raw), detailing their definitions, typical ranges, advantages, disadvantages, and the type of traders they are best suited for.",
"columns": [
"Spread Type",
"Definition",
"Typical Spread Range",
"Advantages",
"Disadvantages",
"Best For"
],
"data": [
{
"Spread Type": "Fixed Spreads",
"Definition": "A spread that remains constant regardless of market volatility. Broker sets a fixed bid–ask difference.",
"Typical Spread Range": "Usually 1.5–3.0 pips on major pairs",
"Advantages": "Predictable costs; stable pricing; ideal for beginners",
"Disadvantages": "Higher cost than raw/ECN; may widen during extreme volatility; not market-reflective",
"Best For": "Beginners; low-frequency traders; those needing stable pricing"
},
{
"Spread Type": "Variable Spreads",
"Definition": "A floating spread that changes with liquidity and volatility.",
"Typical Spread Range": "Tight in liquid markets (0.1–1.0 pips), wider in volatility (5+ pips)",
"Advantages": "Reflect real market conditions; competitive pricing during active sessions",
"Disadvantages": "Costs unpredictable; may widen sharply during news; more complex to manage",
"Best For": "Day traders; swing traders; traders active during liquid sessions"
},
{
"Spread Type": "Ultra-Low Variable Spreads",
"Definition": "A form of floating spread with near-zero pricing sourced from multiple LPs; commission charged separately.",
"Typical Spread Range": "0.0–0.3 pips in liquid periods; 5–10 pips in volatility",
"Advantages": "Lowest trading costs; no broker markup; ideal for precision strategies",
"Disadvantages": "Commission fees; spreads still widen; higher deposits required",
"Best For": "Scalpers; EA/algorithmic traders; high-frequency traders"
},
{
"Spread Type": "Raw Spreads",
"Definition": "True interbank prices with zero markup from the broker; commission charged.",
"Typical Spread Range": "0.0–0.2 pips under normal liquidity",
"Advantages": "Transparent pricing; lowest overall cost for active traders; ideal for advanced strategies",
"Disadvantages": "Commission mandatory; volatile spreads; requires experience",
"Best For": "High-volume traders; news traders; ECN users; algorithmic systems"
}
]
},
{
"@type": "Dataset",
"@id": "https://www.radexmarkets.com/en/News/NewsDetail?p=bnNuT2ZidUNvQlk9#bid-ask",
"name": "Bid and Ask Price Example",
"description": "A visual representation of Bid and Ask prices with a numerical example and their corresponding trading actions (Sell vs Buy).",
"columns": [
"Bid",
"Ask"
],
"data": [
{
"Bid": "1.1200",
"Ask": "1.1250"
},
{
"Bid": "Sell",
"Ask": "Buy"
}
]
},
{
"@type": "Dataset",
"@id": "https://www.radexmarkets.com/en/News/NewsDetail?p=bnNuT2ZidUNvQlk9#trading-session",
"name": "Trading Sessions, Liquidity Levels, and Spread Behaviour",
"description": "This table describes how different trading sessions and market timings influence liquidity levels and spread behavior, helping traders identify optimal trading windows.",
"columns": [
"Trading Session",
"Liquidity Level",
"Spread Behaviour"
],
"data": [
{
"Trading Session": "Asian Session",
"Liquidity Level": "Low–Medium",
"Spread Behaviour": "Spreads tend to be wider due to slower market activity."
},
{
"Trading Session": "European Session (London)",
"Liquidity Level": "High",
"Spread Behaviour": "Spreads usually tighten as liquidity increases."
},
{
"Trading Session": "U.S. Session (New York)",
"Liquidity Level": "High",
"Spread Behaviour": "Tight spreads, especially during active market hours."
},
{
"Trading Session": "London–New York Overlap",
"Liquidity Level": "Very High",
"Spread Behaviour": "Tightest spreads of the day; highest trading volume."
},
{
"Trading Session": "Session Opens",
"Liquidity Level": "Volatile",
"Spread Behaviour": "Spreads may widen temporarily due to sudden price adjustments."
},
{
"Trading Session": "Session Closes",
"Liquidity Level": "Lower liquidity",
"Spread Behaviour": "Spreads widen as trading volume drops."
},
{
"Trading Session": "After-hours / Late-night periods",
"Liquidity Level": "Very Low",
"Spread Behaviour": "Spreads often widen significantly."
}
]
},
{
"@type": "Product",
"@id": "https://www.radexmarkets.com/cht/Products/Forex",
"name": "forex",
"description": "Step into the World’s Largest Financial Market\nTrade over 50 Forex Pairs with RADEX MARKETS",
"brand": {
"@type": "Organization",
"name": "RADEX MARKETS"
},
"aggregateRating": {
"@type": "AggregateRating",
"ratingValue": 4.8,
"bestRating": 5,
"reviewCount": 345
}
},
{
"@type": "FinancialService",
"name": "Radex Markets",
"url": "https://www.radexmarkets.com/",
"logo": "https://www.radexmarkets.com/images/RM_logo-W.svg",
"description": "Radex Markets is a global FOREX broker offering low spreads, fast execution, and multiple account types for retail and professional traders.",
"telephone": "+44-20-8610-1608",
"email": "
[email protected]",
"address": {
"@type": "PostalAddress",
"streetAddress": "T55A, Third Floor, Espace Building",
"addressLocality": "Victoria",
"addressRegion": "Mahé",
"addressCountry": "SC"
},
"currenciesAccepted": "USD",
"priceRange": "$$",
"foundingDate": "2021",
"openingHoursSpecification": [
{
"@type": "OpeningHoursSpecification",
"dayOfWeek": [
"Monday",
"Tuesday",
"Wednesday",
"Thursday",
"Friday"
],
"opens": "09:00",
"closes": "01:00"
}
],
"aggregateRating": {
"@type": "AggregateRating",
"ratingValue": "4.5",
"reviewCount": "656"
},
"review": {
"@type": "Review",
"reviewRating": {
"@type": "Rating",
"ratingValue": 4.6,
"bestRating": 5
},
"author": {
"@type": "Organization",
"name": "Radex Markets"
}
},
"sameAs": [
"https://www.facebook.com/radexmarkets",
"https://www.instagram.com/radexmarkets/",
"https://www.linkedin.com/company/radexmarkets",
"https://x.com/RadexMarkets"
]
}
]
}
