The Truth About Zero-Spread Trading

Zero-spread trading sounds like every trader’s dream. But is it really the smartest choice? Here, Hassan explains the hidden costs and why you also need to consider execution speed.

This type of trader is likely to be wasting their money and their time.

I’m talking about the traders who want zero spreads at the initial stage of their investment. And if you’re this type of trader, keep on watching.

Every time you open a trade, you’re actually paying a small cost. The bid ask spread. Here’s how it works.

The bid is the price buyers are willing to pay or the price you’re selling at. The ask is the price sellers are asking for or the price you’re buying. And the spread is simply the difference between those two prices.

So, if EURUSD shows a price of 1.1 at 1.1002, the spread is two pips.

When you enter a trade, you immediately start slightly negative because you open at the higher price and you’re closing at the lower price.

But here’s the thing, if you’re trading at zero spread, you’re not getting the best execution for your trade.

It can sometimes be slow, might not be the best price and you can encounter slippage. So, let me know, are you this type of trader and have you learned something from this video?