The spread is the difference between the purchase price and the sale price of a security, currency or asset. Spread is usually used on charts to graphically represent the spread at a glance and is a popular tool among Forex traders. This indicator is displayed as a curve that shows the direction of the spread relative to the price of supply and demand. As a rule, highly liquid currency pairs have lower spreads.
Spreads are calculated based on the initial parameters, and the trader often needs to determine the difference between the purchase and sale prices manually. Traders trying to catch small fluctuations in spreads should focus on a spread with a large number of digits after the decimal point. Usually, the spread indicator fluctuates in a very narrow range.