Beginners question about pips spread, in and out
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Thread: Beginners question about pips spread, in and out

  1. #1
    I have alittle confusion herebeen demoing for approximately 5 or 6 months now, and my question is:

    state should I enter a market with a 4 pip spread, and whether the market moves great, state 40 pips in my direction, the disperse being 4, currently if I shut my trade, will I have profit of 32 pips? or 36 pips? I know it cost me 4 pips to input, but will it cost me 4 pips to depart? That is my own confusion.

    thanx

    - J

  2. #2
    Quote Originally Posted by ;
    I have alittle confusion here, I been demoing for approximately 5 or 6 months now, and my query is:

    state if I enter a market with a 4 pip spread, and if the market moves good, state 40 pips in my leadership, the spread being 4, currently if I shut my trade, will I have profit of 32 pips? or 36 pips? I know it cost me 4 pips to input, but will it cost me 4 pips to depart? This is my confusion.

    Thanx

    - J
    Hi,

    You profit will be 36 pips. You only pay the spread after.

  3. #3
    The spread is the difference between the bid and the ask price. When you buy you cover the ask price. When you market you receive the bid price.

    Bid price is the price your broker is willing to buy from you your brief or sell.
    Ask price is the price your broker is willing to sell to you for your buy.

    So if the price is 1.2800 bid and 1.2804 ask.

    You would buy at 1.2804 when the chart shows 1.2800. That is the spread. Now if the price goes to 1.2840. You close the trade at the bid price, that's the price shown on your chart. Hence the math looks like this

    1.2840 - (1.2800 .0004 spread) = .0036

    expect that helps
    Scott

  4. #4
    Thanx, I been demo'in for weeks and that was one of my own questions. I saw a vid on a successful trade, and the guy in the vid said something like you will pay the disperse to get out of the transaction or something like that, which made me ask the question here. Thanx for input signal, im such a noob, thanx that wont go live another month!

  5. #5
    His commerce was a trade that is short. If that is true, then the video is accurate. The spread could be paid while the trade was closed with a buy order at the ask price.
    So, when buying, the spread is paid at the start of the trade.
    When shorting the spread is paid in the end of the commerce...

    It was a very good question. And applies to other types of markets.

    Due Scott



    Quote Originally Posted by ;
    Thanx, I been demo'in for weeks which has been one of my questions. I found a vid on a successful commerce, and the guy in the vid said something like you'll pay the spread to escape the trade or something like this, which left me ask the question . Thanx for inputs, im such a noob, thanx that I wont go til next month!

  6. #6
    The spread is the spread you become billed once on entrance.

    Have fun and Best of Luck

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