Floating spread or fixed spread ? - page 2
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
A BUY is closed at Bid, we perceive a change in spread as a changing in Ask relative to Bid, so the Spread widening because Ask moves relative to Bid can cause a Sell's SL to be hit or for it's TP not to be hit. In reality a widening spread can also be a move in Bid relative to Ask, but we wouldn't usually perceive this as a change in spread but just as the Bid price moving.
As you say yourself, a change in spread can also be in bid. What your perceive is not the problem, the facts are that widening spread can affect bid AND/OR ask. So your affirmation that "a BUY's SL and TP is not affected" is not right. BUY SL and TP can be affected by widening spread, as well as SELL SL and TP.
As you say yourself, a change in spread can also be in bid. What your perceive is not the problem, the facts are that windening spread can affect bid AND/OR ask. So your affirmation that "a BUY's SL and TP is not affected" is not right. BUY SL and TP can affected by widening spread, as well as SELL SL and TP.
My broker only deduct spreads when opening trade not when closing it. So when spread become widen when closing a trade, it doesn't affect me.
Most broker charge from 2-3 pips fixed spread on EurUsd. there are little brokers who charge less than that.
Floating is not suitable for scalping because the spreads may become widen when you want to open order and it may remain widen till signal expire. (Example.: you want to enter into market and take 10pips and get out but spreads become widen to the extent that you have more spreads pip to cover than pip to gain.)
Can we perceive a widening of spread that affect Bid price ? Not so easy, but they are situation where it is possible, by comparing differents brokers charts. Here is an example which I took yesterday only and that lead me to begin this thread.
EURCHF is highly monitored by SNB (Swiss National Bank) :
The Swiss National Bank on Thursday (12/13/2012) decided to leave its minimum exchange rate of CHF 1.20 per euro unchanged as widely expected by economists.
So, see below a chart from a broker with fixed spread, on D1 EURCHF
Now look at this, from a floating spread broker.
What do you think about Bid price affected by widening spread ?
My broker only deduct spreads when opening trade not when closing it. So when spread become widen when closing a trade, it doesn't affect me.
Most broker charge from 2-3 pips fixed spread on EurUsd. there are little brokers who charge less than that.
Floating is not suitable for scalping because the spreads may become widen when you want to open order and it may remain widen till signal expire. (Example.: you want to enter into market and take 10pips and get out but spreads become widen to the extent that you have more spreads pip to cover than pip to gain.)
Can we perceive a widening of spread that affect Bid price ? Not so easy, but they are situation where it is possible, by comparing differents brokers charts. Here is an example which I took yesterday only and that lead me to begin this thread.
What do you think about Bid price affected by widening spread ?
How do you know that the only thing which makes a difference between those 2 charts is the spread ? if you can't say that the spread is the only difference, which I don't think it will be, then it's not a valid comparison. The real cause of the difference may be coincidental with the spread . . . or it may not be, how would you tell ?
Real price of EURCHF cannot go below 1.20, because SNB doesn't let it be, what you do not understand there ? If you see a chart with price largely below 1.20 then that's the broker is playing with the price, bid or ask or both. What other explanation have you for this evidence ?
Are you sure you know what spread is ? How can a broker deduct spread only at opening of a trade ?
Spread is the brokers fee. and it is the gap between ask and bid, so it is deducted when you open an order. (For example: if you broker is 3pip fixed and You place a buy order at 1.0356 you won't start profiting from your order until the trend reach 1.0360. so the spreads "your Broker fees for trading through their company" is deducted from your account immediately, not when you close trade. You will notice that t times your trade always start from loss. That is because of spreads they deducted immediately you place an order.)
Real price of EURCHF cannot go below 1.20, because SNB doesn't let it be, what you do not understand there ? If you see a chart with price largely below 1.20 then that's the broker is playing with the price, bid or ask or both. What other explanation have you for this evidence ?
I disagree with you.
I agree with RaptorUK:
I think what happens to the above chat has nothing to do with ask or bid. I have two fixed spreads broker but at times one may be at 1.0346 and other at 1.0342.