| CHAPTERS |  |
| |
| LESSONS |  |
| |
Forex Leverage and Spreads |
Forex Leverage and Forex Spreads are TWO distinct features of Forex Market.
Let's deal with Forex Spread first.
A spread is the difference between BUY and SELL price of a currency pair.
Your broker will give you TWO different prices for the same currency pair - example:
Eur/Usd: 1.5586 (sell) and 1.5589 (buy)
so, if you want to SELL the EUR/USD currency (because you think USD dollar is going to go up) - then you will be able to sell it at 1.5586
IF you are going to BUY the EUR/USD currency(because you think EURO is going up) - then you wil be able to buy it at 1.5589
The difference between buy and sell (1.5589-1.5586) = 3 pips is called the SPREAD.
Spread is basically the broker's fee for opening your trade.
|
|
Printer Friendly