Been trading for a while but still get confused about how bid/ask spreads actually impact my entries and exits.
Sometimes I feel like I’m losing money just from the spread alone before the market even moves. What’s the real deal here?
Yeah, you lose money from the spread right away - that’s just the entry fee for any trade.
Buy at ask, sell at bid. You’re instantly down by the spread the second you open.
Learned this the hard way scalping GBPJPY. Spread was 3-4 pips during news, so I needed the market to move that much just to break even.
Now I always check spreads first. EURUSD might be 0.8 pips during London session, but 2-3 pips at 3 AM. Huge difference for quick trades.
Swing trading? Doesn’t matter much since you’re after bigger moves. Day trading? Those pips add up fast across multiple positions.
Spread is your broker’s cut on each trade. Tighter spreads during major sessions make a huge difference.
I skip trading during rollover when spreads get wider.
The spread hits your P&L the second you enter. You buy EUR/USD at 1.0985 ask but can only sell at 1.0983 bid. That 0.2 pip difference is gone from your account instantly. This affects your position sizing. If you risk 2% per trade with spreads eating 1 pip and your stop at 20 pips, you’re risking more than it seems. Spreads widen during news and thin markets. A 1 pip spread can jump to 5-8 pips in seconds, impacting profitable trades.