FX trading is a growing community of traders that are turning this into the largest market with $3 trillion in trades daily. This high volume of trades makes the market unaffected by most individuals trades.
First, to best understand the concept of spread trading, you need to understand the basics on currency.
There is no universal price for any currency, just differences between them. Therefore the prices of currencies area always given in comparison to another. For example, you will see USD/CAD = 1.02. This means that $1 dollar will buy you $1.02 CAD.
Now that we have a better understand on how forex traders view the way currencies are looked at and calculated we can start to define what a spread is. When you get forex quotes you're going to notice that you will end up with a bid and ask price.
The bid simple means the price the forex market maker is willing to buy and the ask price simple means the price the forex market maker is willing to sell the currency at. The spread is basically the difference between the bid and ask price.
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