Kevin Kenneth599 Rivera#23

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How do spreads affect forex trading costs?

The spread is the difference between bid and ask prices, representing the broker’s fee or market liquidity cost. Institutions often trade with ultra-tight spreads in interbank markets. Retail traders face wider spreads, especially on exotic pairs. Benefits: tighter spreads lower costs and improve profitability. Risks: during volatile conditions, spreads widen dramatically. Traders should select brokers offering consistent spreads and avoid overtrading high-cost pairs. Spreads remind traders that costs compound—profitable trading requires efficiency as much as accuracy.