The spread in forex definition refers to the difference between the bid (sell) price and the ask (buy) price quoted for a currency pair.

The spread in forex definition refers to the difference between the bid (sell) price and the ask (buy) price quoted for a currency pair. It is the built-in transaction cost you pay each time you enter a trade, typically measured in pips. For example, if EUR/USD is 1.1050/1.1052, the spread is 2 pips. Spreads can be fixed or variable: fixed spreads stay constant but may widen during extreme market conditions, while variable spreads float with liquidity and volatility. Major pairs like EUR/USD often have tighter spreads than exotic pairs because they trade in deeper markets. Your effective cost depends on account type and broker model - some offer ultra-low spreads plus a commission; others quote higher all-in spreads with no separate fee. Understanding spreads helps you compare brokers, choose the right pairs and sessions, and set realistic stop-loss and take-profit levels. To reduce spread costs, focus on liquid sessions, avoid low-liquidity news spikes, and use limit orders when appropriate.

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