Be careful of fluctuations in the spread

Geko is here.

In foreign exchange rates, the difference between the bid price and the ask price is called the spread, and spreads can fluctuate.

You might think, "Why now?"

but it is the spread that is easy to forget.

When choosing an FX broker or account type, many people consider the spread as one of the criteria.

Generally, the narrower the spread, the more advantageous it is for trading.

However, for many brokers and accounts, the spreads shown are labeled as "average" or "principle fixed," and even if listed as fixed, the eligible currency pairs may be limited.

In cases of "completely fixed" spreads, spreads can be set wide to begin with.

Considering these things, it is reasonable to think that a "narrow, fixed spread" might be more of a trader's wish than a reality.

In other words, you should keep in mind that spreads can change, which is one element of risk management.

For discretionary traders, risk management might include avoiding events or times when spreads are likely to widen, taking deeper stop levels, and managing margin with ample safety to spare.

For automated trading systems (EAs), you might add to the above by configuring entry restrictions when spreads are wide.

In any case, I believe that risk management is the most important measure to protect your assets.