Spread in Forex & Indicator

Forex Trading - Spread & Indicator

Who didn't know the spread? Every day traders who trade in forex market will directly deal with the spread. But more broadly the use of spread and its influence on the overall trader few who review it. In this article we will examine the role of spread and calculations in forex trading as well as the correct definition of the spread.

If we look at forex quote or price, usually always followed by the value of the bid and ask prices. Spread is the difference between the selling price (bid) and the buy (ask) quotes or quotes, sell and buy. This is the revenue earned by the broker at each time we sell, the spread will be charged between 2 points to dozens of points depending on the currency pairs.

Size (Value) of spread may vary within each pair.  No forex broker that uses a fixed spread, the spread does not change in any market condition. However, some are using the spread floating system, which spreads fluctuate depending on market conditions.

 

Spread Forex

Usually forex spread (floating) has been pegged by each broker and will not undergo significant changes too except on further developments, forex broker feels the need to increase the spread. Although this spread can be said to remain or uncertain, but in the rules of each broker is usually added to the sentence that "will increase the spread when a very strong fundamental issues affecting the market", where the rate of movement of the currency pair is very fast.

For an experienced forex trader, this moment is a moment that they eagerly awaited, because it's not every time that trader could gain profit in a very short time. When there is a change in the spread, it wouldn't be a problem for the trader who already open position at the beginning. Because the effect is not going too big, unless the trader is in a loss position, the swelling spread it hurts. But for a trader who just entered the market, the swelling spreads will caused a deep impact, especially coupled with the presence of a very small margin, or arguably only able to withstand the movement below 100 points.

Since there're number of forex traders who also perform open position at the same time, sometimes there are delays in the open position and of course this is very detrimental to a trader. There is a possibility of spread borne already swollen and the desired points for their misses the delay. For that, consider the spread on the pair you used before transacting currency.

Spread MetaTrader indicator — displays current spread in the main window of the chart. You can modify the font parameters, indicator's position and the normalization of the spread value. The spread is redrawn after each tick, ensuring the most current and active spread value. This can be useful for brokers with variable spreads or with spreads that are widened often. The indicator is available for both MT4 and MT5.

Input parameters:

• font_color (default = Red) — color of the spread indicator.
• font_size (default = 14) — size of the spread indicator.
• font_face (default = "Arial") — font of the spread indicator.
• Corner (default = ANCHOR_LEFT_UPPER) — location for the spread indicator on the chart.
• spread_distance_x (default = 10) — horizontal distance from the corner to indicator.
• spread_distance_y (default = 130) — vertical distance from the corner to indicator.
• normalize (default = false) — if true, then the spread value is normalized and is given in conventional pips. If false, then the spread is given in the current pips as is. Can be useful for nonstandard quotes.
• AlertIfSpreadAbove (default = 0) — if greater than zero, then a sound alert will be issued if spread becomes greater than the given value.
• DrawTextAsBackground (default = false) — if true, the text label with the spread value will be drawn as background. It can be useful if you want to prevent the indicator from obscuring the chart.

Spread in Forex

Example 

This indicator cannot be used to generate trading signals. It can only assist you to make trading decisions, set proper stop-loss or take-profit levels and inform of the current market situation in a simple and fast manner.

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