Risk and trade management
Spread and slippage
The spread is the gap between the buy (ask) and sell (bid) price; slippage is getting filled at a worse price than requested.
Why it works
Both are real costs. With small targets or fast markets they can turn a winning strategy into a losing one.
How to use it
Avoid tiny targets, trade liquid hours and be careful around news, when spreads widen and stops slip.
The typical mistake
Scalping 3-pip targets on a pair with a 2-pip spread.
FAQ
What is Spread in trading?
The spread is the gap between the buy (ask) and sell (bid) price; slippage is getting filled at a worse price than requested.
How do you trade Spread?
Avoid tiny targets, trade liquid hours and be careful around news, when spreads widen and stops slip.