Spread

The gap between the bid and ask. It is the immediate cost of crossing the market.

1 min

Why it matters

Spread is friction. If you trade frequently, spread can dominate your results.

Trading use: the point is not vocabulary. The point is prediction: what changes when this shows up?

Common trap

Treating spreads as fixed. They widen in stress and illiquid hours.

Example

EURUSD spread is 0.8 pips normally, then widens to 5–15 pips during a spike.

Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.

Notes

Spreads are a regime variable. Your plan must include ‘thin liquidity mode’.

If you see this repeatedly, you are in a different regime than your model assumes.
Regime change usually means position size change.
When in doubt: trade smaller, or don’t trade.