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Forex Spreads Explained: Complete GuideForex Basics

Forex Spreads Explained: Complete Guide

Learn what forex spreads are, how they're calculated, and strategies to minimize your trading costs. Complete guide with fixed vs variable spreads comparison.

Edith Balazs - Author
Written ByEdith BalazsFact-Checker & Research Lead
Marcus Thompson - Fact Checker
Fact Checked ByMarcus ThompsonTrading Platforms Expert
Last UpdatedOct 26, 2026
 
 

Frequently Asked Questions

Spreads are calculated by subtracting the bid price from the ask price. The result is expressed in pips, where 0.0001 equals 1 pip for most currency pairs.
The two types are fixed spreads (remain constant regardless of market conditions) and variable spreads (fluctuate based on liquidity and volatility).
Major currency pairs like EUR/USD have lower spreads due to high liquidity — there are more buyers and sellers, creating a more efficient market with tighter pricing.
Spreads are your primary trading cost. Lower spreads mean you keep more of your profits, while high spreads eat into your returns, especially for high-frequency traders.
Spreads are typically tightest during the London-New York session overlap (8 AM - 12 PM EST), when trading volume and liquidity are at their peak.

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Edith Balazs

Edith Balazs

Fact-Checking • Research • Data Verification

About the Author

Edith is a Certified Financial Analyst (CFA) with a background in financial journalism. She leads our fact-checking team, verifying every data point, fee structure, and regulatory claim in our broker reviews to ensure accuracy and reliability.

Fact-Checker & Research Lead — Everything you find on BrokerAnalysis is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback.

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