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Forex Guide · Risk & Costs

What is spread in forex? Bid, ask and your trading cost

Every trade starts slightly negative because of the spread. Knowing how it works helps you choose the right account and avoid stop losses hit by a spike in spread.

Qazi Forex Tips
By the Qazi Forex Tips team, led by Dr. Qazi Abdul Basit, Ph.D
Updated 23 October 2026

Bid, ask and spread

The bid is the price you sell at; the ask is the price you buy at. The spread is the difference. If EURUSD is 1.10000 / 1.10012, the spread is 1.2 pips.

A buy opens at the ask and closes at the bid; a sell opens at the bid and closes at the ask. That is why a new trade starts with a small loss equal to the spread.

The cost in money

Cost = spread in pips × pip value × lots. Example: 1.2 pips × $10 × 0.50 lot = $6 per trade. On a raw spread account, add the commission (for example a fixed amount per lot per side).

When spreads widen

  • Around high-impact news such as NFP and CPI.
  • At the daily rollover (5:00 PM New York time, about 2:00–3:00 AM Pakistan time).
  • In quiet hours and on less traded pairs.

MetaTrader charts show the bid price, so a sell trade's stop loss can be hit when the ask jumps during a wide spread, even if the candle never touched your level.

Why a sell stop can be hit when the bid candle never touched it: the ask jumps when the spread widens.
Why a sell stop can be hit when the bid candle never touched it: the ask jumps when the spread widens.

Choosing an account

Scalpers usually prefer raw spread plus commission; swing traders care less about a few tenths of a pip. Compare the total cost (spread plus commission) on the symbols and hours you trade.

Khulasa (Roman Urdu / Hindi)

  • Bid par sell, ask par buy; farq spread hai.
  • Cost = spread × pip value × lots (+ commission).
  • News aur rollover par spread barhta hai.
  • Sell ka SL spread barhne se bhi hit ho sakta hai.

Questions

What is a good spread in forex?

On major pairs like EURUSD, well under 1 pip on raw accounts plus commission, or around 1–1.5 pips on standard accounts; it varies by broker and time.

Why is the spread high on Gold?

Gold moves in larger amounts and is quoted to two decimals, so spreads look larger; they also widen around US news.

What is the difference between fixed and variable spread?

Fixed spreads stay the same in normal conditions; variable spreads move with market liquidity and can widen sharply around news.

Is spread charged on closing a trade?

The spread is paid once per round trip: you enter at one side of the price and exit at the other.

Why did my stop loss hit when price did not touch it?

For sell trades, the stop is triggered by the ask price; charts show the bid, so a wide spread can trigger it.

What is a raw spread account?

An account with very low spreads plus a separate commission per lot.

Watch the video lessons

Video lesson · 12:35Best time to scalp forex and Gold in Pakistan and IndiaVideo lesson · 13:10How to read and analyse NFP news dataVideo lesson · 15:28How to select a forex broker: a simple guide

Education only, not financial advice. Trading forex, Gold and CFDs carries a high risk of loss. Contract sizes, spreads and leverage differ by broker; check your own broker's specifications.